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Shell Shock?

New rules are driving small firms into shells, where they could get a nasty surprise.

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This story appears in the December 2004 issue of Entrepreneur. Subscribe »

In the wake of the IPO in August, private business ownersare once again daring to dream of taking their public.And yet, just as the IPO window may be opening, lawmakers andregulators are working to slam it shut by implementing tough newrules for public companies.

Recently enacted accounting and auditing standards, such asthose mandated by the Sarbanes-Oxley Act, are so onerous thatthey're driving a new interest in so-called nonreporting publiccompanies. These companies offer a comparatively simple process ofgoing public through the purchase of a publicly traded company"."

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