# Why do companies list on the ASX?



## mini696 (4 August 2009)

What do companies gain by listing on the ASX?  Can they make more profit, or is it a tax thing?


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## Trembling Hand (4 August 2009)

mini696 said:


> What do companies gain by listing on the ASX?  Can they make more profit, or is it a tax thing?




To start an endless game of pass the parcel.

Or exit strategy for founders,

Or raise funds for growth etc.


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## jono1887 (4 August 2009)

Easy way to raise funds...


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## matty2.0 (4 August 2009)

I thought the question was more ...why do they list on the asx as opposed to other xchanges?


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## aaronphetamine (4 August 2009)

Excellent Question Mini696

One main reason is to raise funds to expand the business. When you raise equity there is no need to repay the amount, whereas raising debt needs to be repaid.

Another reason is that to list on the ASX is to shift ownership from possibly one person to a group of people who can sell their holdings to other people. Equity holders demand that the company elects a board of directors who elects a CEO to run the company. This allows the company to become perpetual, where as your small plumbing business down the road will close down when the owner retires.


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## mini696 (5 August 2009)

matty2.0 said:


> I thought the question was more ...why do they list on the asx as opposed to other xchanges?



Sorry for the confusion Matty.  The question was just a general "Why do they go public/whats in it for them"?


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