Publicly listing a company: the advantages and disadvantages

Website design By BotEap.comA company’s reasons for deciding to go public often include the ability to gain access to capital markets for financial expansion and acquisitions. They have typically invested many years in recouping profits and securing loans, and instead of selling, they want to stay with the company and be a part of its future growth.

Website design By BotEap.comEven if your business adapts to floating, it may not be the right option for you. There are a number of key pros and cons to weigh:

Website design By BotEap.comAdvantage:

Website design By BotEap.como Gains access to new capital to develop the business

Website design By BotEap.como A float makes it easier for you and other investors to make your investment

Website design By BotEap.como You can offer employees additional incentives by granting stock options

Website design By BotEap.como Being a public company can give customers and suppliers greater peace of mind.

Website design By BotEap.como Your company can get a higher public profile, which can be good for business.

Website design By BotEap.como Having your own shares traded gives you greater potential to acquire other businesses, as you can offer shares and cash

Website design By BotEap.como Generally, personal guarantees from directors are not required for loans

Website design By BotEap.comDisadvantages:

Website design By BotEap.como Your business may become vulnerable to market fluctuations, which are beyond your control.

Website design By BotEap.como If market conditions change during the float process, you may need to abandon the float.

Website design By BotEap.como Floating costs can be substantial and there are ongoing costs as well, such as higher professional fees.

Website design By BotEap.como You will need to consider the interests of shareholders when running the business, which may differ from your own goals.

Website design By BotEap.como You may have to give up some management control of the business and ultimately there is a risk that the company will be taken over.

Website design By BotEap.como Public companies must comply with a wide range of additional regulatory requirements and comply with accepted standards of corporate governance

Website design By BotEap.como Managers could be distracted from running the business due to the demands of the float process and dealing with investors afterwards.

Website design By BotEap.comIt generally takes 6 months for a company to go public on the stock exchange, although the time period can range from 3 months to 2 years. You will need a variety of professional advisors to assist you with the legal, financial, accounting and valuation aspects of the public listing, as well as preparing brochures, subscribing for shares, and assisting with IPO plans.