Preparing the legal opinions and the 10b-5 letter for a US IPO
Preparing the legal opinions and the 10b-5 letter for a US IPO

The following Corporate guidance note provides comprehensive and up to date legal information covering:

  • Preparing the legal opinions and the 10b-5 letter for a US IPO
  • When is a legal opinion and a 10b-5 letter required?
  • Scope of the company's counsel's opinion
  • Assumptions and qualifications
  • In-house and local counsel opinions
  • Factual matters
  • Scope of the underwriters' counsel's opinion
  • 10b-5 letter
  • Timing and process

This Practice Note explains the purpose, nature and scope of the legal opinions prepared by each of the company’s counsel and the underwriter’s counsel and the 10b-5 letter prepared jointly by both for the benefit of an underwriter in the context of a US initial public offering (IPO). This Practice Note also outlines the timing and process in respect of the preparation of the opinions and 10b-5 letter. Produced in partnership with Thomas France, a partner in the Corporate Transactional practice group of Venable LLP in Tysons Corner, Virginia office.

When is a legal opinion and a 10b-5 letter required?

In an initial public offering (IPO), the underwriting agreement will include as conditions to closing the delivery of legal opinions from each of the company's counsel and the underwriters' counsel to the underwriters at closing. The opinion of the company's counsel will express certain legal conclusions about matters relating to the company and the offering, and the underwriters' counsel's opinion will express certain legal conclusions about matters relating to the offering. In addition to the legal opinions, the underwriting agreement will require counsel to the company and the underwriters to deliver a letter, commonly referred to as a 10b-5 letter or negative assurance letter, to the underwriters at closing. The company's counsel and the underwriter's counsel will each need