Benefits
There are many advantages that accrue to companies that attain a public listing of their shares. Some of the key considerations and benefits are:
1. Creating a market for the company's shares;
2. Enhancing the status and financial standing of the company;
3. Increasing public awareness and public interest in the company and its products;
4. Providing the company with an opportunity to implement share option schemes for their employees;
5. Accessing to additional fund raising in the future by means of new issues of shares or other securities;
6. Facilitating acquisition opportunities by use of the company's shares; and
7. Offering existing shareholders a ready means of realizing their investments.
Drawbacks
While there are benefits to going public, it also means additional obligations and reporting requirements on the companies and its directors:
1. Increasing accountability to public shareholders.
2. Need to maintain dividend and profit growth trends.
3. Becoming more vulnerable to an unwelcome takeover.
4. Need to observe and adhere strictly to the rules and regulations by governing bodies.
5. Increasing costs in complying with higher level of reporting requirements.
6. Relinquishing some control of the company following the public offering.
7. Suffering a loss of privacy as a result of media interest.
Lellah answered the question on November 8, 2021 at 07:00
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