The decision to list a company on a Stock Exchange is one that requires careful preparation and consideration on the part of the business owner. The process of listing a company is known as an initial public offering. When a company lists, it is valued and additional shares are issued which can be traded on a Stock Exchange.
You may decide to list a company for a number of reasons, such as:
Before listing your company, you need to be 100% positive that you definitely want to do this as not only is the initial public offering process a costly one, but it is also time consuming and one that you cannot afford to get wrong.
It is very important that when you want to list a company on a Stock Exchange that you seek advice from your lawyers, accountants, financial advisors, and other consultants to ensure that it is appropriate to list the company and that the correct steps are taken.
Some of the important positive and negative considerations of listing a company on the stock exchange include:
In a broad sense, the steps to list a company on a Stock Exchange are:
Appoint a consultant to prepare the paperwork for the initial public offering
Decide on the terms of the initial public offering and prepare disclosure documents for the initial public offering
The consultant then organises for the registration of the company with the Stock Exchange
Initial discussions begin with potential investors using managed fund investors to test the waters
The consultant helps to determine the price of the stock
The company lists and is traded on the Stock Exchange, with share price subject to market forces
Before listing, there are a number of matters that you and your management team need to consider including:
When making the decision to list a company on the Stock Exchange, it is critically important that you obtain advice from all relevant consultants involved in listing the business.
If you do not take the right steps and heed advice during this process, it is more than likely that the listing of the company will be a disaster and cost you dearly without achieving anything.
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