# Plain Language Summary: Greenlighting Growth Act

This bill makes it easier for newer, smaller companies to go public by reducing the amount of financial paperwork they have to file with the government. Specifically, it changes the rules about how far back in history these companies need to show their financial records when they first sell stock to the public or when they list on a stock exchange.

Right now, when a young company wants to go public, it often has to provide detailed financial statements going back several years, including information about any other companies it bought along the way. This bill says that emerging growth companies—which are defined as relatively new public companies—only need to show financial records going back to their earliest audited period (basically, the first year they officially had their books checked by an accountant). More importantly, once a company grows large enough that it's no longer considered an "emerging growth company," it still won't have to dig up and present old financial records from before it went public. This is a permanent break from the usual requirement.

The practical effect is that younger companies will have less administrative burden and lower costs when trying to raise money from investors, since they won't need to spend time and money gathering and organizing old financial data. Supporters argue this helps startups and growing businesses get to market faster. Critics might worry that investors get less historical information to evaluate a company's track record, though the company still has to provide audited financial statements from when it went public forward. The bill essentially gives these newer companies a fresh start—they only need to show investors what they've done since becoming a public company, not what happened before.

Greenlighting Growth Act

Haridopolos, Mike

Greenlighting Growth ActThis bill limits the financial information an emerging growth company (EGC) must submit to the Securities and Exchange Commission. An EGC is a type of issuer that qualifies for reduced disclosures after its initial public offering (IPO) if its annual gross revenues are below a specific dollar amount. For example, an EGC must currently provide two years of financial statements after its IPO, rather than the three required for other companies.&nbsp;Under the bill, an emerging growth company is not required to present certain financial statements from acquired companies. This applies to statements from the time period prior to the earliest audited period presented in connection with the EGC’s IPO. In addition, the bill provides that no issuer that was formerly an EGC is required to present financial statements older than its earliest audit performed in connection with its IPO.&nbsp;