September 26, 2005
Some of Canada's top securities lawyers were interviewed, including David Chaikof, for this article on converting a company into a trust.
Companies whose management are considering morphing the company into an income trust should consider a number of factors, says David. One is for private companies to understand the time, diligence, effort and expense involved in going public. This intensive process goes not only for the initial public offering, but also for the regular filing and disclosure requirements that will follow.
Private companies should also know why they've chosen to go public through an income trust offering, as opposed to a traditional stock offering, says David. The method of going public should meet the needs of the business. "It's critical that CEOs also carefully consider all other alternatives for financing the growth of their business, including private or public debt financing, the traditional Canadian-only common share IPO or a Canada-U.S. cross-border IPO, which could include a listing on the TSX, Nasdaq, AMEX or NYSE," says David.