If you’ve made a success of your privately-owned company, then it’s time to consider listing on the stock market. Reaching this stage requires a lot of careful thought and consideration but for companies who are ready—financially and culturally—there are great benefits to be had, including better access to capital and liquidity, and an increased global profile.
If your focus is on UK trade, then it’s natural to consider joining one of the London Stock Exchange’s markets. More than 2,200 companies are listed here—from more than 70 countries—and the exchange has a strong global reputation for regulation.
So, how do you go about joining? Here are a few things to consider:
Choose a market
Depending on your size, you need to think about which market you want to be listed on. You can choose from:
- Main Market: This is where you’ll find the larger, household name companies listed. It has four segments:
- Premium: The highest standards for the largest companies
- Standard: Subject to minimum EU standards
- Specialist: For those companies that wish to target professional and expert investors only
- High Growth: For companies trending quickly up, which aspire to become Premium listed companies in time
- AIM: This is for smaller companies which are in the process of growing.
- Professional Securities: For listed depositary receipts and debt targeted at professional investors.
There are a number of advisers that you need to have in place, each playing an important role in your market flotation. These are:
- A sponsor (for Premium listings) or corporate adviser (for Standard listings)
- A broker to assist with pricing your shares and attracting interest in them
- A reporting accountant to review your financial affairs
- A lawyer to ensure you fulfil your legal requirements
Get ready for the market
As NI Business Info demonstrates, the next stage of preparation involves:
- Ensuring that your current shareholders have an agreed minimum elapsed time on selling their shares after flotation
- Updating any contracts and insurance policies that you have
- Deciding on how to split your new share capital
- Protecting intellectual property
- Creating a prospectus for investors (to be verified by UKLA)
Getting listed on the market
Then it’s time to apply to both the London Stock Exchange and UKLA for admission to trade (see information on the fees involved here).
If you have met all of the criteria, then you’ll need to promote your flotation—with help from a broker—and hold an ‘impact day’. This is when you publish your prospectus and, hopefully, begin to attract interest from investors.
It’s worth stressing that this post offers a short, top-level introduction to the process. It’s likely that all of the above will take at least three months, and possibly as much as 12 months, to complete. The key is to secure the best possible advisers and lean heavily on them to tap into their skills and expertise as you embark on this journey. Floating on the stock market can be a big milestone for any business and bring big benefits to your company. However, it’s vital to get this process right so that you can reap these rewards.
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