Question

For an IPO, an immediate family member would be considered a Restricted person if ________.

1) They own more than 10% of the company's shares
2) They are an employee of the company
3) They are a member of the company's board of directors
4) All of the above

Answer 1

For an IPO, a family member is considered a Restricted person if they meet any of the listed criteria, including owning more than 10% of shares, being an employee, or serving on the board of directors.

Step-by-step explanation:

For an IPO, an immediate family member would be considered a Restricted person if all of the above conditions apply. These conditions are: 1) They own more than 10% of the company's shares, 2) They are an employee of the company, and 3) They are a member of the company's board of directors.

When a firm goes public through an IPO, it provides a way to repay early-stage investors such as angel investors and venture capital firms and to raise financial capital for expanding operations. Venture capitalists, in particular, may sell their part ownership to the public.

When it comes to decision-making in a company with numerous shareholders, typically a board of directors is elected to make decisions on the shareholders' behalf.