How to Turn a Public Company Private
Turning a private company public has many advantages but there are also a number of risks. The Initial Public Offering allows the company to raise capital in a short period of time, giving rise to numerous challenges. Gaining investors and putting your company on a public stage improves the market value. If you want to take company public, there are quite a few options available. However, it is advised to hire a professional attorney who can take through the legal processes.
Things Required:
– Detailed and accurate financial statements of your company
– Underwriters
– Lawyers
Instructions
-
1
Before doing anything else, consider hiring an expert attorney to prepare all the required legal documents for you. It is recommended to keep a record of your financial statements, business relationships and other bank transactions so the prospective investors can reach a decision easily. Remember that legal documents can only be prepared by experts in this area and therefore you should not try to prepare the documentation by yourself.
-
2
Next, obtain underwriters, who can be found in investment financial institutions. Once you hire an underwriter, it is his responsibility to promote and market your company in the initial stages. His job will also include determining the price of the IPO and the number of shares that can be bought by the potential investors. Usually, investment banks will make the move and buy your shares at an agreed price. These shares are then sold on to the public.
-
3
Do not forget to fill the registration form with the SEC. The registration will be marked as effective once it’s gone through the legal process. Underwriters can help you market your company to the investors in a better way. Wait for them to take the risk of buying your company shares and sell them to the public on their own. Distributing brochures and setting up meetings with potential investors will promote your business in the early stages.
-
4
You must also agree on an IPO price so the bank could buy the shares of your company. An IPO price for the underwriters should also be agreed upon so they can start paying you for the sold out shares. Make arrangements to receive funds from the bank and underwriters.
