Admission to Stock Exchange

Public limited company must comply with the Admission to Stock Exchange listing rules before they are allowed to trade their shares publicly.

Your public limited company must provide information which satisfies the listing requirements. In this case, the Financial Services Authority set the rules and also governs public companies in the United Kingdom.

The Financial Services Authority is acting as the United Kingdom Listing Authority or UKLA.

Overall, there are two types Stock Exchange markets in the United Kingdom. The Senior Equity Market and the Alternative Investment Market (AIM).

Senior Equity Market

The Senior Equity Market is for larger public companies. It is also known as the Official List.

Alternative Investment Market

The Alternative Investment Market is the secondary stock market. It is opened to smaller companies in the United Kingdom.

Ordinarily, your public limited company must meet the following criteria in order to be eligible for admission to stock exchange in London.

Firstly, your company must be registered as a public limited company. Secondly, it must intend to place on the market shares which are expected to have a market value of £700,000 or more.

3 years preceding company accounts

Your company must have filed 3 years company accounts previously with Companies House. In addition, your company accounts must be audited. Preferably with unqualified audit report attached.

To put it simply, your company will not be admitted to stock exchange if it has not filed accounts covering three years preceding to your application for listing in the Stock Exchange.

Approved Sponsors

Most importantly, your directors must consider that your company is financially viable. Furthermore, your company must have sufficient working capital.

This admission requirement is satisfied by your Approved Sponsor to the issue. Usually, a merchant bank or stockbroker with overall responsibility for arranging the issue. This includes sending a letter to the United Kingdom Listing Authority stating that your directors have made careful enquiries to satisfy themselves and the Approved Sponsor that the working capital is indeed adequate.

The final principal admission requirement is that your company intend that at least 25% of any class of shares will be in the hands of the public. This is a must and it is spelled out in The Listing Rules.


Thereafter, your company must also satisfy the listing particulars requirements. Subsequently, your company must prepare and publish a prospectus which complies with Chapter 5 and 6 of The Listing Rules.

Correspondingly, you company must publish the following information.

  • Information on the shares which are to be listed.
  • Your share or loan capital.
  • Principal activities.
  • Place of business and employees.
  • Company’s finances. In the form of balance sheet and profit and loss accounts for the last three years. Also, management and on trends in the company’s business.

On the other hand, your company need to include a statement in your prospectus that your company accounts have been audited for the last three financial years. Furthermore, the people responsible for the prospectus need to make a declaration. To the effect that to the best of their knowledge, the information given in that part of the prospectus for which they are responsible is in accordance with the facts and contains no admissions likely to affect the import of the prospect us.

Additionally, you must also disclose if there is changes in your auditors in the previous three years. In this case, the details of audit options, tax clearances, and the terms of the directors’ service contracts.

Above all, your information in the prospectus should not be misleading, false or deceptive. Otherwise, your public limited company will incur both civil and criminal liability under the Financial Services and Markets Act 2000 if evidence supporting materials errors on the prospectus is established. In other words, do not even try to mislead your potential investors and manipulate the information on your prospectus.

Public Limited Company obligations

Public limited company (PLC) obligations continue after admission to Stock Exchange. Thus, your PLC must continue to comply with the listing rules. The United Kingdom Listing Authority requires PLC to comply Chapter 9 of the Listing Rules at all times.

UKLA Rules to follow

Your public limited company obligations include:

  • Avoid a false market in your company’s shares.
  • Give notice of the date of a board meeting at which your directors will decide on the payment of dividends and their decision.
  • Announce preliminary profits and losses for the year once your board of directors has given approval for the figures.
  • Publish information about certain acquisitions and realisations of assets including the purchase by your company of its own shares.
  • Comply with the detailed provisions of the Listing Rules as to the content of your company’s annual report and accounts which includes your obligation to prepare half-yearly company accounts.
  • Give details of any changes in the board of directors, as well as adopting rules on dealings by your directors in your company’s shares which contained in the Model Code on directors’ dealings as spell out in The Listing Rule 9. The code prevents directors from abusing their position and insiders dealing.

Public limited company obligations with Companies House

In addition, your PLC must also deliver audited company accounts and financial statements to Companies House. Accordingly, your audited company accounts must reach Companies House within six months after your accounting year ended. Otherwise, your PLC will receive an automatic late filing penalty. The penalty starts from £750 to £7500.

Another compulsory filing your PLC must file is the Confirmation statement.

Trading certificate

A Public Limited Company (PLC) must apply for a Trading certificate before starting trading.

Apply a trading certificate for your PLC

Universally, your PLC must satisfy the authorized minimum share capital requirement. Which is the nominal value of your PLC’s allotted share capital must be at least £50,000 or €65,600. However, your PLC cannot satisfy the share capital requirement by a combination of euro and sterling shares or by shares in any other currency.

Consequently, your PLC must deliver the form SH50 to Companies House and includes the following information.

  • State whether your authorised minimum share capital requirement will be satisfied in sterling or in euros.
  • You specify the amount, or estimated amount, of your company’s preliminary expenses.
  • Specify any amount or benefit paid or given, or intended to be paid or given, to any promoter of your company. This includes the consideration for the payment or benefit.
  • Provide a statement of the aggregate amount paid up on your company shares on account of their nominal value.
  • Be accompanied by a statement of compliance. The statement of compliance is a statement that your company meets the requirements for the issue of a certificate under section 761 of the Companies Act 2006. The registrar may accept the statement of compliance as sufficient evidence of the matters stated in it.

Exemption from a trading certificate

On the other hand, your PLC is not required to apply for a trading certificate, if your company is upgrading its status from a private to public limited company status.

However, when re-registering your private limited company to a public limited company. The nominal value of your PLC’s allotted share capital must be at least meet the authorised minimum share capital requirement. Additionally, the authorised minimum share capital requirement must be satisfied either entirely in sterling shares or entirely in euro shares.

Seal a deal or borrow money

In the event, your PLC does business or exercises any borrowing powers in contravention of section 761 of the Companies Act 2006. In this instance, you have committed an offence. Your company and every officer of your company is in default.

Conviction and fine

A person guilty of an offence under section 767 subsection (1) of the Companies Act 2006 is liable:

(a) on conviction on indictment, to a fine;

(b) on summary conviction, to a fine not exceeding the statutory maximum.

The transaction still valid

A contravention of section 761 does not affect the validity of a transaction entered into by your company, but if your company

(a) enters into a transaction in contravention of that section, and

(b) fails to comply with its obligations in connection with the transaction within 21 days from being called on to do so, the directors of your company are jointly and severally liable to indemnify any other party to the transaction in respect of any loss or damage suffered by him by reason of your company’s failure to comply with its obligations.

Who is liable?

Your directors who are so liable are those who were directors at the time your company entered into the transaction.

On the other hand, your PLC must also deliver its company accounts and confirmation statement to Companies House on time.

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