09 May 2016

CU LAB: IPO basics: a fundamental step - tidy up the home front

In a perfect world your corporate structure is as clean as a whistle and ready to IPO without any pre-IPO housecleaning ‒ but this isn't a perfect world, says Stuart Byrne.

Related Knowledge

Get in Touch

Get in touch information is loading


Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.


In a perfect world your corporate structure is as clean as a whistle and ready to IPO. Rarely however do we come across companies that are ready to do this without some form of restructuring.

For example, do you have assets still in your business that are non‑core and not part of the value proposition for investors going forward? These assets will need to taken out, and part of that is what's the timing? Do we do it now to get it over and done with, or do we make it contingent upon the IPO succeeding and try and save the costs involved in doing that if the IPO doesn't succeed?

Corporate structure also involves looking at the parent company you currently operate under. Some companies have sister companies, for example, and to float with a single vehicle you'll have to fold one of those companies in underneath.

Sometimes corporate groups are currently headed up by a foreign company. We can list foreign companies on ASX but does that produce the right tax consequences for the company, the shareholders and the future investors?

There are lots of things in addition to tax which affect this, for example stamp duty and other logistical considerations. You might have a number of contracts that exist within your corporate entity. If you start moving corporate entities around, does it involve a change of control that you need to take into account of and therefore get third party consents? You might have financing facilities, for example, which will need to be restructured either because of the corporate restructure you're doing or for the very fact that you're going through an IPO.

Perhaps when dealing with a corporate restructure you have separation arrangements you need to take account of. Separation arrangements might involve moving employees from one group to another, or perhaps splitting existing contracts, or putting in place service contracts from the entity that you're leaving behind that's providing a service at least for a short period to the listed company in the months or years following the IPO.