Why cant all business' issue bonds/shares?

quirkster

Excuse the ignorance but I fail to see why my local family run food-store cant issue bonds or shares to the populace of my town. Whats stopping OTC trading taking place on small business' throughout the country?

What regulations are in place that stop local stock exchanges being set up with extremely low-cap local companies and business' being listed?

What regulations exist that stop 'Byrnes Butchers' for example from issuing e15'000 worth of bonds to the locals?

soddy1979

You can issue shares if you want. They won't trade on an exchange because of market capitalisation requirements, and you wouldn't be sufficient demand to have a stock exchange for microcaps on a regional (as in regional in Ireland), hence you would trade them OTC, - but there is nothing stopping you changing the ownership structure of your company in order to raise capital.

Same is true for issueing bonds. Bonds are essentially loans, so if you can get somebody to lend you money, you could say you are issueing a bond.

That's assuming you can get people to invest in your company, be it as a creditor or shareholder.

dunkamania

Main obstacle is costs, bond prospectuses are well over a hundred pages long, and require legal professionals to put together. On the other side the investors would need their own advisers to do some due diligence.

democrates

I quite like the general idea.

Any stock exchange has onerous overheads so atm it's not feasible to set up a local one but scale economies can answer that. It doesn't need the traditional bourse network infrastructure, we can bet and bank online, why not trade microcaps in our own jurisdiction.

The big expense per listed business is in auditing accounts and legal work to verify title/claims. But like conveyancing, these processes could be streamlined to remove inefficiency. Computerise the lot.

christeb

^^ it's a very interesting idea. A lot of work for sure, but interesting.

*sets up new thread looking for investment...* PM me