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Most companies start as private limited liability companies and later opt for enlistment, which is going public, in order for the public to subscribe for its share. A company that goes public from private will now Drop “Ltd” and use “plc”. The procedure for becoming “plc” is as follows:

1. By Issuing a prospectus: This is an invitation to members of the public to subscribe to the shares of a company. This can only be done after necessary consultation and registration with the stock exchange.

2. By Racing: This means selling the whole shares to clients of the issuing Houses rather than offering it to the general public. The issuing House may underwrite a percentage of the shares while the remainder is offered to the public.

3. By Offer for Sale: This is a method that allows the issuing house to buy off the whole shares initially and later offer it to the members of the public through subscription.

4. Rights issue: This means that the shares being offered for sale are restricted only to the existing shareholders of the company on a given ratio. For example a ratio of one to one – existing share, ten existing shares to one – new share, etc.

5. Private Placement: This is when shares are offered to a few large institutions that are investors. Financial institutions such as insurance companies or investment trusts take up the entire shares.

6. Open Offer: The shares offered for sale, in this case, are restricted to existing shareholders without any limit to the number of new shares each shareholder may desire for.

7. By Tender: The entire public is invited to bid for shares. The tender contains various prices for the shares while the bidder states the price he is willing to pay. The highest bidders are allotted the shares and of course, receive cash discounts after.


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