Reverse takeovers or reverse mergers are one way of transitioning your private company to a public company. In this article, we’ll explain what a Reverse Takeover (RTO) is and it’s benefits.
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Public companies
Public companies are a type of company that you can register with the Australian Securities & Investments Commission (ASIC).
Compared to private companies, public companies have better capital raising potential but are also subject to greater obligations.
The main advantage public companies have in raising capital is the ability to issue shares to the public. To this end, public companies can appear on the Australian Securities Exchange (ASX). However, public companies may choose to remain unlisted. They may also have more than 50 non-employee shareholders.
However, with great power comes great responsibility. Public companies also have more obligations and requirements to fulfill. Disclosure documents (e.g. a prospectus) must be provided in order to trade shares publicly. To remain listed on the ASX, public companies must comply with ASX requirements including their listing rules and corporate governance principles. Public companies also must have at least three directors as well as at least one secretary. Additionally, they must hold annual general meetings (AGMs). ASIC also has different reporting requirements for public companies. These reporting requirements involve lodging audited financial reports.
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