Popular the IPO forms today for businesses

The IPO (Initial Public Offering) is an important turning point to help businesses mobilize capital from the stock market, opening up opportunities for sustainable growth and expanding their scale of operations. Today’s popular IPO forms all bring strategic benefits, helping businesses improve access to capital, enhance brand reputation and increase financial transparency in the eyes of investors.

What is an IPO? Conditions for issuing IPO of enterprises

According to the definition of IPO (Initial Public Offering) is the process in which a business issues shares to the public for the first time to list on the stock exchange. This is the transition from a private company to a public company, allowing the business to raise capital from outside investors, while also providing opportunities for the public and financial institutions to own shares. of the company.

Pursuant to the provisions of Clause 1, Article 15 of the Law on Securities 2019, when wanting to issue an IPO, businesses need to meet the following conditions:

• Contributed charter capital at the time of registration for offering is 30 billion VND or more calculated according to the value recorded in the accounting books;
• Business activities for 02 consecutive years immediately preceding the year of registration for offering must be profitable, and at the same time have no accumulated losses up to the year of registration for offering;
• Have an issuance plan and a plan to use capital obtained from the stock offering approved by the General Meeting of Shareholders;
• A minimum of 15% of the voting shares of the issuer must be sold to at least 100 investors who are not major shareholders; In case the charter capital of the issuing organization is 1,000 billion VND or more, the minimum ratio is 10% of the voting shares of the issuing organization;
• Major shareholders before the initial public offering of shares of the issuing organization must commit to holding at least 20% of the issuing organization’s charter capital for at least 01 year from the date of completion of the tranche. offer for sale;
• The issuing organization is not under criminal prosecution or has been convicted of one of the crimes of violating the economic management order but has not had its criminal record erased;
• There is a securities company that advises on registration documents to offer shares to the public, except in cases where the issuing organization is a securities company;
• Have a commitment and must list or register to trade shares on the stock exchange system after the end of the offering;
• The issuing organization must open an escrow account to receive money to buy shares in the offering.

Current forms of conducting IPOs for businesses

According to the provisions of Article 10 Decree 155/2020/ND-CP, currently there are 4 main IPO forms that businesses can choose from, the forms include:

Form 1: Initial public offering of shares to raise additional capital for the issuing organization: This is a form of IPO in which a business issues shares to the public for the first time with the purpose of raising additional capital for business activities, expanding scale or implementing new investment projects. Enterprises will sell shares to investors on the stock market and receive new capital.

Form 2: Initial public offering of shares to become a public company through a change in ownership structure but without increasing the charter capital of the issuing organization: In this case, the business issues shares to the public to become a public company, but does not raise new capital. The stock offering is only for the purpose of converting the ownership structure, expanding share ownership to the public without changing the company’s charter capital.

Form 3: Combine forms 1 and 2: This is a combination of two methods of offering shares to the public. The enterprise both mobilized new capital from the initial issuance of shares and transformed into a public company through changing the ownership structure without increasing charter capital. This is a flexible combination, helping businesses achieve both financial and administrative goals.

Form 4: Initial public offering of fund certificates to establish a securities investment fund: This form involves the initial public offering of fund certificates to raise capital to establish and manage a securities investment fund. This fund will invest in stocks, bonds and other financial instruments, to bring profits to investors who buy fund certificates.

Benefits of doing the IPO for businesses

Implementing an IPO brings many important benefits to businesses, not only helping to mobilize capital quickly but also opening up opportunities for sustainable development. Below are the outstanding benefits that businesses can receive when conducting an IPO:

• Raise capital quickly: Implementing the IPO helps businesses quickly access large capital from the stock market, strongly support expansion projects and improve financial capacity;
• Enhance brand reputation: Becoming a public company through IPO helps businesses strengthen their position, enhance their reputation and attract attention from partners and customers;
• Expand investor network: IPO opens up opportunities to access a large network of investors, from large financial institutions to individual investors, creating a solid foundation for long-term development;
• Create conditions for business development: Raising capital and improving reputation through IPO creates favorable conditions for businesses to invest in technology, research and scale expansion, promoting sustainable growth.

Important notes when implementing an IPO

To ensure success in the IPO process, businesses need to prepare carefully and follow important steps. Below are some things to note when implementing, classifying and choosing the IPO form for your business:

• First, prepare accurate documents: Preparing complete, accurate and transparent listing documents is an important factor to help businesses meet the requirements of regulatory agencies, ensuring the IPO process goes smoothly and effectively;
• Second, follow the correct listing process: Enterprises need to fully comply with the listing process from application submission, financial inspection to legal procedures, helping to ensure regulatory compliance and avoid problems arising during the IPO process;
• Third, choose a reputable securities consulting company: Choosing an experienced and reputable securities consulting company will help businesses build an effective IPO strategy, from determining stock prices to optimizing financial and legal aspects.

Consulting and support services for conducting IPO at Long Phan

At Long Phan, we are proud to be a unit with extensive experience in consulting and supporting businesses to carry out IPOs in a highly effective way. We are committed to accompanying your business throughout the IPO implementation process.

Long Phan provides comprehensive consulting and support services including:

• In-depth consulting on conditions for implementing IPO for businesses;
• Consulting on current popular IPO forms;
• Advise your business on choosing an IPO form suitable to the situation and practical needs of the business;
• Support customers in preparing documents for IPO issuance;
• Guidance on IPO issuance strategies helps ensure effectiveness and avoid risks;
• Accompanying customers throughout the IPO process.

>>> Reference: Consulting on IPO.

Customers who are interested in issues related to the IPO form, please immediately contact Long Phan’s consultants for professional support. We are committed to accompanying and resolving all challenges during the IPO process. If you need professional support from our team of experts. Please contact Long Phan immediately via the hotline: 0906735386 to receive dedicated and professional advice to ensure the listing process takes place effectively.