Going Public??

THE DECISION TO GO PUBLIC IS NOT AN EASY ONE FOR ANY ORGANIZATION.

Privately owned companies, whether they be owner managed and operated or funded by a group of investors, including active and inactive investors, come in all sizes and meet all types of economic needs.

While the very largest companies are publicly traded either on a stock exchange or over the counter, some very large companies, such as United Parcel Service, remain private.

In recent years there has been an influx in certain area such as the home security and alarm industry, internet service providers, where a large U.S. public firm "giant" has entered into the market and acquired a large chunk of the Canadian players.

Clearly, some owners choose to remain private.

Disadvantages of going public:

• Loss of Small Business Deduction for Tax Purposes
• Cost - underwriting, selling & stock listing fees
• Additional reporting requirements including Audit, Legal & Investor relations fees
• Escrow requirements and hold periods restrict selling and trading
• Price volatility - market corrections
• Disclosure & accountability to investors, press and security exchange commissions
• Reporting requirements - may affect managements focus of business, may give competitors valuable performance data.

Advantages of going public:

• Access to public markets to finance future growth.
• Ability to attract & retain key management & personnel.
• Ability to give employees shares of the new company and to benefit with growth.
• Facilitates leveraging of equity base.
• Facilitates acquisitions through share issuances.
• Provide liquidity and exit strategy for owners.
• Going public can make entrepreneurs rich.

Alternatives to going public include:

• Remaining private
• Merging or being bought out by a public company or US "giant".
• Selling your business to a competitor
• Associating with a group, dealer network, to offer full services.
• Franchising or licensing your technology, product or brand name.
• Selling assets or key pieces of technology
• Obtaining financing for growth
• Grants and loans from Government agencies.

Sam Seidman, CA - Toronto, Ontario Canada - is a Canadian chartered accountant, who provides business advisory services and corporate finance services for Small Business Owners & Entrepreneurs.   These services include accounting, bookkeeping, taxation, business plan preperation, consulting and due dilegence, mergers and acquisitions.   Member of the Institute of Chartered Accountants of Ontario.  Located in Toronto.

http://www.samseidman.com                                   email:   help@samseidman.com