Becoming a public company is a major step for any business.
With continuous disclosure requirements becoming more complex and governance issues mounting, it’s critical that companies planning an initial public offering (IPO) do just that—plan—thoroughly and well in advance of any target dates they have in mind.
Certainly, the process can be broken down into fairly broad strokes: initial preparation; file a preliminary prospectus; address any issues raised by the exchange or by provincial securities regulators; issue a final prospectus; wait for the regulator’s final decision document; then begin trading shares and operating as a public company.
Making all that happen, however, is far from simple. It takes time, people and resources—both internal and external—to effectively execute the IPO process. The challenges of collecting and providing all the information an IPO prospectus requires are significant, and the importance of assembling the right people— from the management team to the necessary legal, financial and advisory help—can’t be understated.
No company should embark on an IPO without a solid knowledge of what’s involved. Regardless of industry, private companies looking to go public in Canada follow the same process and take similar steps. This paper provides an overview of those key steps, reviews the information all companies must provide and points to some common challenges IPO aspirants may face along the way.