The Road to IPO - Step 3: Prepare and lodge a prospectus
A prospectus is a document issued by a company setting
out the terms of its equity issue (or debt raising). It provides the
background, financial and management status of the company so that
investors are able to make an informed decision about whether to
invest. In most cases, a prospectus or similar disclosure document is
required to list. The prospectus must be lodged with both the
Australian Securities and Investments Commission (ASIC) and ASX.
Amongst other things, a prospectus is required to contain all information that investors and their advisers would require to make an informed assessment of:
- The assets, liabilities, financial position, profits and losses, and prospects of the organisation; and
- The rights attaching to the shares.
The due diligence process surrounds the preparation of the prospectus, allowing all parties to satisfy themselves of their legal responsibilities and the structure of the transaction.