In principle, a limited liability company (LLC) is a legal entity that runs a business and is made up of shares. Ownership of the company by the shareholders is according to the amount of shares held. The construction of an LLC separates the personal wealth of the company owners, so the company as its own legal entity also has its own separate wealth.

An LLC is established to run business activities and create profits. As the company continues to grow and develop its economic globalization, it is spurred to expand its business to be larger and have farther reach. One of the ways to help the company do so is to  turn it into a listed company.

In order to turn a company into a listed or publicly-traded company, its must first do a general offering or what is commonly called “go public” or to do an IPO (Initial Public Offering). This process is where the company first offers it shares to the general public. And then such process of offering shares to the general public is called by the term “right issue”.

After having been listed, the company can then utilize the funds gained from the public. In turn, the company should start to step-by-step make changes and operate so that its shares are of use to the public who have invested. In order to make sure that this change of status is effective and beneficial for all parties involved, the company must be skilled in employing the stock market for the positioning of the company and obtain the public’s trust.

The process of going public starts with the preparation stage. During this stage, the company holds a General Meeting of Shareholders in order to secure all the shareholders’ approval. Then the amount of shares that are to be released to the public is decided. After that, the Articles of Association of the company is altered to reflect the change of status to a publicly-traded company. Once it gets approval, the company appoints an underwriter and the capital market supporting professions and institutions such as a public accountant, a legal consultant, a notary, and a share valuer, keeping in mind that said parties are registered to the Financial Services Authority (Otoritas Jasa Keuangan/OJK), previously to Bapepam-LK.

The next stage is to submit a registration statement. The company submits its documents that contain the Principle of Transparency and a concise prospectus of information regarding the company such as the company profile, income statement, projections of company performance, as well as the intended use of the funds to be gained from the public.

On top of that, this stage includes the official opinions of the supporting professions on the company financial statements, legal status, and entirety of the company data. The company is accountable for the legitimacy of the all said data. After Bapepam-LK has received the documents, they will be evaluated. If the documents are deemed complete, then a notice of effectiveness will be issued. However if Bapepam-LK sees the documents are incomplete, then the company has to first submit the remaining documents.

After the registration is approved, the next stage is the initial public offering. The security issued by the company can be marketed to the public at this stage. The mechanisms of the IPO is regulated by the underwriter. This offering period goes on in a span of 1 to 5 working days. After the offering period ends, the company can then do stock rationing to its investors in at the latest 2 working days.

The last stage is the listing of shares at the stock market. Listing is done at the latest 3 working days after stock rationing. The company is also required to report the results of the initial offering to Bapepam-LK at the latest 3 days after stock rationing.

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