ANALYSIS ABOUT THE OPTION 1ST
(First option available with the Company is that Company remains a private company and seeks to raise further capital.)
1. Less compliance in raising fund- if Company raise the fund privately through their close relative, friends as happens in case of a private company , Company is not required to company more legal formalities as in case of a public company.
2. Total earnings of the company will be either distributed as dividend or kept as retained as retained earnings in both the case benefit goes to the existing members only.
3. . Being private it gives freedom to for the followings-
(a) SOX regulations are not to be complied with as this is the requirement of a listed Company .
(b) Management can think easily about any decision of the Company as they generally are less in number as compare to the public one .
(c) there is internal and external assurance as far as the activities of the concern are concerned.
(d) private company generally provide various exit route for their investor as compare to public, but holding period is generally from 4 to 8 years, which enables the management to think in a well manner about the long term wealth.
(e) shares of the company generally does not change hands as far as holdings is considered which implies stability to the concern.