March 15th, 2010
How to Take a Small Company Public
Going public can seem like a good deal and can raise a lot of money, but for a small company, such as most property management services , it can be difficult and almost not worth the effort. The reason is that for many small companies the risks outweigh the advantages. In a small company, few stocks have been issued. When a company goes public these stocks are temporarily devalued, and are permanently a diminishing percentage of control over the company. This can worry many small business owners, but there are services that will help out a small business in becoming a publicly owned company.
One of these services claims that the benefit to becoming a public company is that private investors are more likely to put money into the company when it is already in the public and has a symbol. Usually these services will do a top to bottom review of the company, even possibly performing an audit on the company to discover if there is anything keeping the small business from selling stocks publicly. This also serves as a bill of health on the company later. If there are any problems in going public some services will help by submitting any paperwork necessary, others will not, but will tell you what you need to do so that they can continue. This can include things like a minimum number of share holders must be found, and a certain amount of shares must be bought. The current standards on this is forty shareholders and 20,000 shares. Most services do not cover this part of the process. It can also include things like reincorporation, which a service might be willing to fill out the paperwork for.
Larger companies such as Transglobe Property Management Services do not usually go through a service like this. Usually a bank will be willing to write up an initial public offering for larger companies. It is only when no bank will help a company out that they may even consider one of these services.
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