How big does your company need to be to list on the ASX?

Last updated 21 May 2016

For many organisations, achieving an exit for its members via a listing of its securities on the stock exchange may be highly desirable, but for the uninitiated, it can be a complex and somewhat daunting process.   A consultation paper released by the ASX on 12 May 2016 proposes changes to these criteria.  Read our summary of the proposed changes to the eligibility requirements.Corporate LawyersRegulatory requirements are imposed by both the Australia Securities Exchange (ASX) and the Australian Securities and Investments Commission (ASIC).  The main requirements that need to be considered to determine whether your organisation is suitable to list on the ASX are described below.

How big does a business need to be to list?

Chapter 1 of the ASX Listing rules (Rules) describes the threshold and regulatory tests which must be satisfied (or waived) to be eligible to apply for listing.  To meet the financial thresholds, the organisation must satisfy either the profits test described in Rule 1.2 or the assets test in Rule 1.3 as provided for in Condition 8 of Listing Rule 1.

Profits test

The profits test provides that the following items must be submitted to the ASX:

  • the organisation must be a going concern;
  • the organisation’s main business activity must have been the same for the last three (3) years;
  • three (3) years of audited accounts must be provided to the ASX;
  • the organisation’s aggregate profit from the last three (3) full financial years must have been at least $1 million; and
  • the organisation’s consolidated profit from its continuing operations for the twelve (12) months to a date of no more than two (2) months before the date the entity applied for admission must exceed $A400,000.

To view the complete profits test click here.

Assets test

Provided that the organisation is not an investment entity, the assets test provides that:

  • It must have a market capitalisation of $10Million or net tangible assets of $3Million (after the costs of fundraising); and
  • less than half of the entities assets must be in cash (or in forms readily converted to cash); or
  • half or more of the entities total tangible assets (after fund raising) are in cash, and the entity has commitments to spend half of its cash consistent with its statement of business objectives that it must provide to the ASX; and
  • the entity’s prospectus, product disclosure statement or information memorandum must include a statement that it has enough working capital to carry out its stated objectives; or
  • the entity must have at least $1.5Million in working capital (note there may be exceptions).

In addition condition 1.3.5 of Listing Rule 1.1 must be satisfied by:

  • providing to the ASX with 3 years of audited accounts – note that there may be other requirements depending on the situation;
  • if the accounts have not been audited, the ASX must be notified; and
  • a proforma balance sheet, together with a review by a Registered Company Auditor, unless the ASX agrees that the proforma balance sheet is not required.

Shareholder spread requirements

Condition 7 of Listing Rule1.1 provides, in the case of a new applicant for a listing, there must be at least 400 holders of securities, each of which holds a parcel of the main class of securities with a value of at least $A2000.

Listing an organisation’s securities on the ASX can be a complicated yet rewarding process.  Done well, it is a great mechanism for unlocking the value of the members’ equity and enabling the organisation to raise capital through secondary issues.

Related articles

Proposed changes to the eligibility requirements to list on the ASX, by Dundas Lawyers.

If you require advice regarding the listing of your organisations securities on the ASX please contact:

Malcolm Burrows B.Bus.,MBA.,LL.B.,LL.M.,MQLS.
Legal Practice Director
Telephone: (07) 3221 0013 |Facsimile: (07) 3221 0031
Mobile 0419 726 535


This article is general in nature and cannot be regarded as legal advice.  It is general commentary only. You should not rely on the contents of this article without consulting one of our lawyers. If you would like advice regarding how the law applies to your individual circumstances, then please contact one of our legal practitioners.


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