Look before you list: Key considerations for listing and IPOs

  • A listing brings companies a greatly increased level of exposure.
  • The general state of domestic and global financial markets, and forecasts for those markets, is relevant to the decision as to whether to list.
  • Before the ASX will allow a company to list on the exchange, the company must satisfy either the profits test or the assets test.

People passing by ASX window

Before the decision is made to list a company on the ASX careful consideration needs to be given to the ramifications of such a move.

What to consider before you list on the ASX?

Listings can allow founders to exit and entities to access fresh capital for expansion and raise their profile. These three reasons are, for many companies, the main reason why they list. However a listing brings companies a greatly increased level of exposure.

If the listing decision is not driven by founders exiting, then the founders need to assess whether they are the right temperament for controlling a listed company, which is subject to vastly different governance requirements to an unlisted company. Best practice and legal governance requirements include the need for independent directors, shareholder scrutiny of executive remuneration and an enhanced role for auditors, and founders will need to have the right personality to operate under these structures.

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