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What Are The Procedures To Go Public?
There are several methods to go public in the US. There are three main grades of listing:
Here are the levels of stock listing.
OTC PINK SHEETS:
The earliest quotation service for over the counter financial instruments usually termed "the pinks". There are technically no requirements for reports or audited financials on the pinks, though, the pinks have established their own voluntary reporting system and enforce it by publishing symbols to indicate the level of disclosure each firm is subscribing to. To publish voluntary particulars requires charges of around $5000 a year.
THE OTC BB: The OTC Bulletin Board is controlled by the Financial Industry Regulatory Authority (FINRA) and requires that all companies whose equity is exchanged on the OTC Bulletin Board maintain their current reporting status with the Securities and Exchange Commission (SEC), which needs current audited financial statements. There are no cost paid to FINRA for this quotation, but having a public company current with its SEC reports could cost $25,000 - $50,000 annually.
EXCHANGES:
The OTC PINK SHEETS and the OTC Bulletin Board are useful stock markets especially for upcoming and new companies, but clients with well known businesses will want to be on one of the developed and higher equity markets - Nasdaq Small-Cap, Nasdaq NMS or NYSE. Each of these stock exchanges has its own qualifications that a business must meet to be listed on the exchange. Generally the types of qualification elements they look for include asset levels, number of shareholders, required Board level committees, incomes, and market capitalization. In addition all exchanges want the company to maintain a current reporting status in the Securities and Exchange Commission (SEC). Listing on the equity markets usually involves expenses of about hundreds of thousands of dollars.
For a US company a quotation on the US stock markets improve points. For Example, a quotation is a way to:
1) Grow your company quicker and make it more strong by increasing your ability to attract "mergers", "acquisitions" as well as "strategic partners;
2) Expand your company faster and make it more powerful by developing its ability to compete for large corporate opportunities;
3) Maximize your personal profit as an owner by decreasing the amount of time it takes to make money on your investment, and also increasing the valuation of your company, as well as, converting the liquidity of your asset to a more liquid form than that of a private business;
4)Raise money quicker and cheaper by increasing the "liquidity" factor for your shareholders
Now most of these considerations are for firms going public from scratch. For those of you seeking to buy a shell corporation (public shell), to try mergers, then you might want to decide changing a quotation as mentioned above. For more details on this topic try googling keywords like "mergers companies" or "reverse mergers".
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