Qualifying Transaction
Candlefocus EditorTo complete a qualifying transaction, the company applies to the TSX Venture Exchange and files a prospectus. The company must explain its qualifications and any risks associated with the transaction, as well as its financial statements and management's discussion and analysis. If the CPC satisfies all the exchange's requirements, then it will be able to list the company's shares on the exchange, allowing it to become a publicly traded entity.
Once the new public company has been established, the CPC can handle the public sale of the company's shares, which will generate the capital needed to grow the business. The company will then be listed on the exchange and can start trading publicly.
Qualifying transactions can be beneficial to companies with solid business plans and a good management team, as they provide access to additional sources of capital and liquidity to help the business flourish. However, companies should bear in mind the processes and risks involved in qualifying transactions, such as the fact that it needs to be completed within 24 months, and ensure that the company represented well in their filing with the exchange. Overall, a qualifying transaction can be an effective and beneficial way for a private company to go public.