Public Companies Law & Practice

Lecture 1
Overview
 Public Companies v Private companies

• Registration as a PLC or LTD -Companies Act

2006.
• “Listed” or “quoted” companies (concerned with
the process of becoming public and consequences)
• Comes with prestige!
• Unquoted public companies.
• Re-registration of a private company as a public
company – Part 7 CA 2006
• Key difference Public v Private – offering shares to the
public (as a way of raising money); private companies cannot to protect
the public and public companies are subject to greater regulation
London Stock Exchange (MARKET) – Share
trading
• Markets enable companies to raise capital and
investors to buy and sell shares [provides a trading
venue]
• The London Stock Exchange (LSE) – Internationally
important attracting companies and investors world
wide.
• It has a number of different markets:
• Equity markets – the Main Market and AIM [lower level entry
requirements – perceived as more risky]
• Share Indexes – The FTSE 100 [standard in this is important
for attracting investors] and other indices
Listing (shares must be listed)
• The Official List maintained by the FCA.
• Categories of listing: Standard (min requirements
for listing) and Premium (more rigorous – basis
of the course)
• Listing conditions (requirements) include
admission to trading on LSE’s Main market;
admission to trading requires shares to be listed.
• Dual applications to the FCA and LSE.
• AIM Companies: not “listed”; regulated wholly by
the LSE.
• Terminology: “listed” VS “AIM Companies”, to cover
both: “quoted”, “publicly traded”
 Why become a quoted company:
Advantages
• Access to capital through IPOs and secondary
issues
• Marketability of the shares (shares at market
price rather than doing this privately)
• Quoted shares can be used as bid consideration
for acquisitions
• Employee incentives (allotting shares to
employees)
• Enhanced public profile (listed company status 
improved trading opportunities)
Disadvantages

• Tighter regulatory control.

• Cost of compliance
• Loss of control for founders
(controlled by shareholers)
• Greater transparency and loss of
privacy
• See Textbook Paras 1.7 and 1.8 for
further discussion (public companies can
de-list to become private again)
 Module outline (1): Continuing
obligations and secondary issues.
• IPO (Initial Public Offering):
 Bringing shares to the market for the first time
 Whether MAIN Market (admission of shares to official list and trading of
main market to LSE) if to AIM  AIM requirements
 Usually involves a capital raise (through offering of shares)
 Major event – Main Market IPOs normally require a
publication of a prospectus approved by FSA
 Professional advisers need to be appointed – Sponsor
(lead role: acts as main point of contant between applicant
contact and FCA and LSE), NOMAD (AIM Sponsor),
Solicitors and others
 See “What’s Market” or LSE website for recent IPO example
 May consider alongside private M&A
 Module outline (2) – Continuing
obligations
• Ongoing obligations (applies for all companies) for listed
companies
 Listing Rules Chapter 9: applies once shares are listed (Premium)
 UK Market Abuse Regulation (“UK MAR”) –disclosure of inside
information and managers’ transactions
 Corporate governance rules (extent to which quoted companies are
bound to comply – obliged to report on compliance in annual report)
 Premium Listed: “Significant” and “Related Party Transactions”
(Chapters 10 and 11 LRs);
 “Substantial transactions ” and RPTs (AIM Rules)
 Market abuse (UK MAR) and insider dealing [prohibitions] (Criminal Justice
Act 1993)
 Disclosure Guidance and Transparency Rules (FCA rules on this)
Module outline (3) – Secondary
issues
• Further capital raising by companies with
shares already listed.
• Types: Rights issues, Open offers and
Placings
• Commercial reasons for secondary issues
– Aston Martin Lagonda Holdings plc.
• Details of other recent examples on What’s
Market
 Regulatory Framework (1)
• Influence of the EU and effects of Brexit.
• Retained EU law
• Prospectus Regulation and Market Abuse Regulation
• Level II Regulation
• This has been transferred from European Authorities  FCA
• Power to make commission Regulations HM Treasury
• Withdrawal Act: Govt given power to amend deficiencies in retained
EU law
• EMPHASIS ON UK REGULATION
• Company and Business Legislation:
 CA 2006 – relevant sections
 Financial Services Regulation:
• Financial Services and Markets Act 2000 (extracts)
• UK Prospectus Regulation and UK MAR (retained EU legislation –
extracts)
• PR Regulation (retained EU legislation – extracts)
Regulatory Framework (2)
Resources Pack:
• FCA Handbook extracts:
Listing Rules, Disclosure Guidance and
Transparency Rules, Prospectus Regulation Rules
and Market Conduct sourcebook.
• FCA Technical Standards and Treasury Regs.
• LSE: Admission and Disclosure Standards and AIM
Rules
• Pre-emption Group and Investment Association
Guidelines
• Examinability Date: 1 May 2022.