Going public

Initial public offering (IPO) is the process of selling shares that were formerly privately held to new investors for the first time. A reverse takeover (RTO) is the acquisition of a public company by a private company so that the private company can circumvent the tedious and complex measures of going public.

Basic going public steps

There are four main activities in publicly listing a company:

 

  1. Decide to go public

  2. Undertake accounting, legal and other due diligence

  3. Obtain regulatory approvals

  4. Market the shares

Considerations for Going Public

 

Enterprises to consider thoroughly before deciding going public. We will advise you to assess the advantages and disadvantages for their companies going for public. Below are some of the basic points:


Advantages
• Enhances access to capital market
• Improves the visibility and credibility of the company
• Reduces personal funding and guarantees
• Provides liquidity to shareholders
• Improves corporate governance
• Helps attract and retain talent


Disadvantages
• Demands management time and resources to comply with regulations
• Increases the need or public disclosure of company details and finances
• Increases pressure to grow

• Dilutes control

You must weigh the advantages and disadvantages of going public in the light of the plans you have for you company. Although this is a significant milestone for you company, you should consider alternatives and discuss the matter thoroughly with your accountants, lawyers and other professional advisers. The time required for a listing varies with companies. It depends on the complexity of the corporate structure and their respective activities, and also the listing requirements of various stock exchanges.


The cost of going public should also be considered. Professional fees will have to be paid to your accountants, sponsors, lawyers and public relations firm. The total fee will depend on the size of the new issue and the cost of time spent by the professional parties on the listing exercise.


Any company offering securities must comply with that jurisdiction’s accounting principles and disclosure requirements, as well as the rules
and regulations of the regulatory authorities. There are strict interpretation and frequent changes. Failure to comply may result in, at a minimum, significant time delays.

Early consultation with an experienced professional firm is important.

 

How can McDonald Carter help?
It is essential that professionals experienced in the accounting principles and the
regulatory environment of the jurisdiction in which you wish to list be a key part of the offering team.

Early consultation

 

Because of extensive reporting requirements, your company will require the expert advice and assistance of accounting professionals. We will give you an initial evaluation of your state of readiness to go public and will assist in upgrading management capabilities - all to help your company preparing for the launch.

Organizational restructure


A company going public must have an organizational structure suitable for public investment. To go public, the business should be conducted through a single corporation or a parent corporation with subsidiaries. In addition, there may be activities or assets and liabilities which are not the core business of the listing company and these should be taken out of the listing group.

Structure for tax efficiency

 

Because of extensive reporting requirements, your company will require the expert advice and assistance of accounting professionals. We will give you an initial evaluation of your state of readiness to go public and will assist in upgrading management capabilities - all to help your company preparing for the launch.