Small business owners,if they become a publicly held company,can be sued by stockholders for management decisions that depress the price of the company stock.

Question

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When a small business owner decides to go public and become a publicly held company, they are subject to various laws and regulations that include being liable to shareholders. Shareholders can sue the company if they believe that there was a breach of fiduciary duty, mismanagement, or if their actions caused the stock price to go down. Therefore, small business owners should be prepared to face legal action from shareholders when they decide to go public.

Small Business Owners,if They Become a Publicly Held Company,can Be