How to Take a Business Public
If your business is growing day by day and you want to expand it further, going public is a good idea. In this way, you will not only be able to get the necessary funds from the general public to make the exponential expansions in your business, but you will also get a chance to make your liability limited as a result of which your personal assets will remain safe if your business liquidates or defaults.
There are some basic guidelines which you have to follow in order to take your business public and to form a company.
– Amendments to the prospectus
– Forms from the U.S. Securities and Exchange Commission
Decide whether going public is right for your business
First of all, you must decide whether going public is a suitable option for your business. Never make hasty decisions and always plan well before you take any step. You must know that going public means you will have to register your business as a public limited company with the SEC and will have to go through a long legal procedure. In addition, you must have good professionals to run the business prudently and to deal with the legal issues.
Hire an underwriter
After making the decision, you will have to hire an underwriter. The functions of an underwriter are mostly performed by investment banks which charge a particular amount of money as commission for providing their services in raising money from the general public. Moreover, if the underwriter fails to gather the agreed amount of money, it will buy the remaining stocks itself to fulfil the minimum subscription requirement.
Start the registration process
Start compiling the documents which are required to register your business. You will have to develop your prospectus, memorandum of association and article of association. Besides, you may have to provide the financial details about your company to the SEC.
Submit the registration form to the SEC
Submit your application form to the SEC in order to register your business as a public limited company. The SEC will go through your application form and the documents, and will ask you to gather the minimum subscription capital to start your business.
Distribute your company’s prospectus and start your road show
After getting permission from the SEC, start distributing your prospectus and begin your road show. Conduct meetings with the managers in different cities and promote your company as much as you can.
Make initial public offering
To register your company in NYSE, you will have to fulfil the basic criteria of raising at least $40 million at a minimum share price of $4 through initial public offering.