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Listing
Listing
means admission of the securities of a company to trading
privileges on a Stock Exchange. The principal objectives of
listing are to provide ready marketability and impart liquidity
and free negotiability to stocks and shares; ensure proper
supervision and control of dealings therein; and protect the
interests of shareholders and of the general investing public.
According
to Section 73 of the Companies Act, every company
intending to offer shares or debentures to the public for
subscription by the issue of prospectus shall, before such issue,
make an application to one or more recognized Stock
Exchanges for permission for the shares and debentures intending
to be offered, to be dealt within the Stock Exchanges or each
such Stock Exchange. Further if the issue amount exceeds 5 crores,
the company has to make arrangements to list the securities in one
more Stock Exchange, apart from regional stock Exchange.
Eligibility
criteria for Listing
The
issuer who decides to come out with Public Issue has to
mandatorily get its securities listed on the Regional Stock
Exchange. The minimum issued capital of the company should not be
less than 3 crores of which a minimum of 25% should have been
offered to the public.
Advantages
of Listing
1.
The investing public gets periodic reports of the listed
companies, which help them to know the performance of the
company.
2. The transaction of the listed
companies are reported in daily newspapers and the investing
public gets regular information on the worth of the securities.
3. Listing ensures liquidity
to the public and free transferability of securities.
4. The listed companies are
treated as widely held companies under the Income Tax Act and all
the advantages available to a widely held company are available to
the listed company under the Income Tax Act.
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