Last week's announcement that Williams is considering a stock market flotation took the F1 world by surprise. To put it mildly. Not only did it seem bold that a team which recently lost a raft of sponsors would have a flotation on its mind but it also seemed odd to distribute a press release simply to say that it is "considering a flotation on the stock exchange." Surely it would have made more sense to wait until the plan was definite and then announce it with a press release. Given that F1 has a history of releasing statements about events which never transpire (those about the mythical rival series spring to mind) could Williams' announcement be something of a public relations faux pas?

The speed at which it all came together wasn't lost on the media with one journalist saying that Williams' plan was explained "in a hastily arranged phone conference." Pitpass' business editor Chris Sylt has been investigating the implications of the flotation for the past week and is preparing a detailed analysis of it. The following is a sneak peek into what is coming up and it begins with some background.

When a company floats the public can buy shares in it in the hope that their value will increase and they can ultimately sell them to make money. Companies which are making profits declare dividends and these can then be distributed between the shareholders. It gives the public a real incentive to invest in a solid business.

In Williams' case the team hasn't said how much of it will be floated, just that Sir Frank Williams will remain the majority shareholder. So the public will not be buying into the entire team, just a portion of it, and one report has speculated that Williams may only list 20% on the stock exchange.

The team is currently run by the UK company Williams Grand Prix Engineering which is 63% owned by Frank with 27% in the hands of Patrick Head and the remaining 10% held by former Sportscar driver Christian Wolff. It looks like the portion to be floated will be transferred to a separate UK company called Williams Grand Prix Holdings plc (WGPH) which was incorporated on 21 December last year. Its formation was the earliest public record of Williams' flotation plan and WGPH is now based at Williams' Oxfordshire headquarters.

There are currently four directors of WGPH: Williams' chairman Adam Parr, the team's chief executive Alex Burns, its in-house lawyer Mark Biddle and a company called London Law Services. The latter is a London-based business which specialises in incorporating companies and WGPH was based at its offices until 30 December last year.

The WGPH incorporation documents state that London Law owned both of the two shares issued in the company but this is likely to change. It is common for advisers to act as caretakers of companies which have just been set up and are likely to have changes in their ownership. The big question is whether the public is interested in buying shares in Williams.

On the face of it you might think that Williams' recent financial track record would be the biggest obstacle to a successful flotation. Only a few weeks ago it was revealed that as of the end of the F1 championship in November last year Williams' bills were paid 9 days overdue. This was 50% slower than at the start of the season and was the second biggest increase in late payment of any of the teams according to business information firm Dun & Bradstreet.

In terms of constructors' titles, Williams is the second most successful F1 team and it has an incredible history. Buying a piece of this is likely to be a big draw for some investors but those who go by the team's results (on or off track) over the past five years may come to a different decision.

Williams has made combined net losses of £5.9m over the past five years and in 2009 its pre-tax profits fell by 50% to £4.5m as it lost sponsorship from bankrupt Icelandic conglomerate Baugur. Then, at the end of last year it lost an estimated £28m in sponsorship due to the departure of four brands including government-owned bank RBS which was alone paying the team around £13m.

This year the team has dumped respected German driver Nico Hulkenberg in favour of Venezuelan Pastor Maldonado who is bringing with him an estimated £9m of sponsorship from local businesses. Although this will give a slight boost to Williams' budget there were huge empty swathes of blue and white on its car's livery when it appeared in Caracas on 14 January. This is admittedly only what is known as an interim livery but the team doesn't have much time before the first race to sell more sponsorship. We will soon see if it can do this and its moves will be followed even more closely than usual due to its flotation intentions.

One thing investors in any business don't like is uncertainty. They want the opposite - guarantees that revenues and profits will increase. Whilst few, if any, businesses can offer that, F1 teams in particular have little visibility when it comes to future revenues. Sponsorship contracts typically only have a duration of three or four years at most and prize money depends on race performance. The situation is not so different when it comes to profits.