For some business, a company reorganisation may be necessary in order for floatation. This process enables a company to identify and change any issues prior to the IPO process beginning, that will potentially cause details or suspend the IPO. Undertaking a Pre-IPO Reorganisation full prepares the business for the complex IPO transaction. Reorganisation may include both accounting and legal procedures.
Pre-Determining an appropriate governance structure can prepare a company for a successful IPO. Good governance procedures ensure a strong leadership team, whilst minimising risk and building a positive culture around the business to the benefit of shareholders. Strong governance can lead to prevention of harmful situations and subsequently presence in the media limelight for the wrong reasons.
This requires assessment of;
- Structure and Function of Directors
- Roles of Shareholder, Board and Management
- Board Size
- Board Skills and Capabilities
- Performance of Board
- Accurate Information Reporting
- Cost Effective Board
- Internal Controls Review
- Clear Business Vision and Strategy
- Risk Management
- Shareholder Communications
- Investor Relations
- Social Responsibility
Any company wishing to float must meet standards set by the listing authority. Standards include financial, operational and structure. The framework helps maintain market rules and quality of the listing market.
- Financial Information
- Minimum Flotation and Market Capitalisation
- Operational History
- Working Capital and Assets
- Number of Shareholders/Share Distribution
- Lock-up requirements
Internal Controls Review
Establishing an effective controls framework according to industry standardised practices. Moving on from outdated and redundant frameworks to reflect the current business environment.
Ensuring the company is up-to-date with all financial reporting standards, laws, regulations and policies is a must, as failure to do so puts the organisation at risk.
This may include updating;
- Reliability of financial reporting
- Feedback on achievement of company goals
- Compliance with existing laws and regulations
Reviewal of company internal controls to ensure business systems can handle accurate financial reporting. This may include a complete overhaul of core business systems, which could take a considerable amount of time to implement (Usually Go’s Live at Year End.)
Accessing the benefits and risks of tax when going public. Issues such as corporate income tax and tax regarding existing and new shareholders. Taking the necessary measures to elevate any risks and opportunities during the process.