Legal Question in Business Law in California

I'm guessing a little at exactly what you mean by both "public company" and "business plan."

When a company first sells shares to the public in an IPO (initial public offering), it will be required under law and rules of the Securities & Exchange Commission to make extensive, in-depth disclosures about its affairs, including its finances, its track record, its management, and the business it now conducts and intends to conduct once it has taken money from the new investors. The information divulged by way of its prospectus (or offering circular or other disclosure document per law) must be scrupulously accurate, not misleading, and rather detailed. Generally, companies discuss their business plans in some detail. Hovever, securities law recognizes that not every detail of a company's business plan must, or should, be disclosed. Certain secret information may properly be left undisclosed, provided its omission does not mislead or defraud potential investors. A company is not required to tell its competitors, or the public, every last detail of its design, engineering, marketing, etc. plans and tactics.

Once a company has become public, it must report to the SEC and to its shareholders regularly. The information required to be disclosed will vary with the size of the company, type of registration it made, number of shareholders, etc. These periodic disclosures mainly discuss past events, such as financial results, major transactions, and the like, but often there is management discussion of results that include forward-looking comments, projections, descriptions of plans in general terms, and the like. This kind of information (usually in more condensed form) can also be read in the companies' annual reports to shareholders.

So, I guess the answer is that there is some limited duty, in some circumstances, to disclose business plans. By no means does this require corporations to tip off the whole world of every major step it will take. Indeed, leaking information may be more illegal than withholding it entirely.

Read The Wall Street Journal any day - it will be full of corporate developments nobody but management knew about the day before.

The other attorney is right on point here. Some level of reporting is required, but most they are not required to give away the keys to the business. Most business plans are highly confidential.Consult with an attorney in your area for specifics.

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise

Franchise Attorney