Going for an IPO – What do companies need to consider?

I - business. One of the topics we discussed was the possibility through an initial public offering ( IPO). Whenever IPOs of the possible benefits of an - pany’s readiness to go public, or whether going public is the best option for it to pursue.

before deciding to launch a shares on the stock exchange.

Readiness of the company’s financials

about this, but I believe this is an aspire to go public have to ensure that their accounting records are - Stock Exchange (PSE) need the three years to check the organiza require that the audited FS be external auditor’s opinion, and - - ous years’ FS. In one case, it took prepare an IPO-ready FS.

To ensure availability and entity has to install internal controls, particularly on the - changing or upgrading its current required to release quarterly data the close of the calendar year. deadline.

Leadership preparation

board of directors. The right - bers who can serve on the au there is proper oversight over the SEC’s Code of Corporate Governance and the PSE’s Corporate Governance Guidelines - and CEO positions. These two positions are typically held by a single individual. If this is the case, the entity has to appoint a be the CEO.

Prospective underwriters and investors are particularly interested in the strength of the with experience in driving the organization’s key business functions. The quality of leadership is one of the biggest factors that investors look at outside of the

Business plan

During the IPO process, under-

BOYET MURCIA 3RD

writers and investors, as well as securities regulators, will need - - - tified various purposes without clear linkage to their business use of proceeds section. Such a a sound business plan. Having a sound business plan enables to float to the public.

Freedom in management decision- making

Gone will be the days when the - degree of spontaneity is lost as the prior approval of the board - sions and even the approval of shareholders for certain special

Loss of confidentiality

deal of confidentiality once it obligations in the prospectus and the continuously required have access to these details? results or an unexpected legal case can adversely affect the

Costs

cash to fund the IPO process, costs of going public, as well as being a reporting issuer. These costs generally include IPO tax, SEC fees, and other transaction costs such as underwriters’ fee, legal and accounting fees, etc. process, and ensure that this will not affect the day- to- day operations of the business. The than a year, depending on the the responsiveness of regulators.

Going for an IPO is an inten - are a lot of expected benefits in - tions and realities of being a public corporation.