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A public company is a company owned by the public rather than by a relatively few individuals. There are two different meanings for this term: A company is, in general, any group of persons, which are known as its members, united to pursue a common interest. ...
Public is of or pertaining to the people; belonging to the people; relating to, or affecting, a nation, state, or community; opposed to private; as, the public treasury, a road or lake. ...
- A company that is owned by stockholders who are members of the general public and trade shares publicly, often through a listing on a stock exchange. Ownership is open to anyone that has the money and inclination to buy shares in the company. It is differentiated from privately held companies where the shares are held by a small group of individuals, who are often members of one or a small group of families or otherwise related individuals, or other companies. The variant of this type of company in the United Kingdom and Ireland is known as a public limited company.
- A government-owned corporation. This meaning of a "public company" comes from the tradition of public ownership of assets and interests by and for the people as a whole, and is the less-common meaning in the United States. See public ownership.
"Publicly-owned company" can also have either meaning, although in the United Kingdom it will usually refer to ownership by national, regional or local government. A shareholder or stockholder is an individual or company (including a corporation), that legally owns one or more shares of stock in a joint stock company. ...
See stock (disambiguation) for other meanings of the term stock A stock, also referred to as a share, is commonly a share of ownership in a corporation. ...
An example of Money. ...
A private company is a company that is not a public company. ...
The initials plc after a UK or Irish company name indicate that it is a public limited company, a type of limited company whose shares may be offered for sale to the pubic. ...
A government corporation or government-owned corporation is a legal entity created by a government to exercise some of the powers of the government. ...
Public ownership (also called government ownership or state ownership) is government ownership of any asset, industry, or corporation at any level, national, regional or local (municipal). ...
United States
The de jure definition of a public company in the United States is defined as a public company is any company that files a Form S-1 with the Securities and Exchange Commission (SEC) and raises money from the public. A public company is also a reporting company. Thus, a public company is any company with 300 or more shareholders as defined in the US 1933 Securities Act that elects to become a reporting company. Under the US 1934 Act, any company with 500 or more public shareholders or a company with some public shareholders and assets of $5 million dollars must become a reporting company. Look up De jure in Wiktionary, the free dictionary The terms de jure and de facto are used instead of in principle and in practice, respectively, when one is describing political situations. ...
The Securities and Exchange Commission, commonly referred to as the SEC, is the United States governing body which has primary responsibility for overseeing the regulation of the securities industry. ...
Public versus private companies A public company has several advantages. It is able to raise funds and capital through the sale of stock and convertible bonds. This is the reason why public corporations are so important, historically; prior to their existence, it was very difficult to obtain large amounts of capital for private enterprises. It has the ability to offer stock and stock options to directors, executives, and employees as part of compensation. This is much less advantageous if the company is required to treat stock options as an expense. Large stockholders, typically founders of the company, are able to sell off shares and get cash which they can put to other uses. In contrast, while ownership in a private corporation can also be sold, in part, determining a "fair value" that is acceptable to all parties can be difficult. In politics, a capital (also called capital city or political capital — although the latter phrase has an alternative meaning based on an alternative meaning of capital) is the principal city or town associated with its government. ...
A convertible bond is type of bond that can be converted into shares of stock in the issuing company, usually at some pre-announced ratio. ...
In financial terminology, stock is the capital raised by a corporation, through the issuance and sale of shares. ...
A stock option is a specific type of option with a stock as the underlying instrument (the security that the value of the option is based on). ...
A private company has several advantages. It has no requirement to publicly disclose much, if any financial information; such information could be useful to competitors. For example, Form 10-K is an annual report required by the SEC each year that is a comprehensive summary of a company's performance. Private companies do not file form 10-Ks. It is less pressured to "make the numbers" - to meet quarterly projections for sales and profits, and thus in theory able to make decisions that are best in the long-run. It spends less for certified public accountants and other bureaucratic paperwork required of public companies by government regulations. For example, the Sarbanes-Oxley Act in the United States does not apply to private companies. The wealth and income of the owners remains relatively unknown by the public. A Form 10-K is an annual report required by the U.S. Securities and Exchange Commission (SEC) each year that is a comprehensive summary of a companys performance. ...
An annual report is a document which a company presents to its Annual General Meeting for approval by its shareholders. ...
Certified Public Accountants (CPAs) are accountants in the United States who have passed the Uniform Certified Public Accountant Examination and have met additional state education and experience requirements for certification as a CPA. In Canada, public accountants are known as Chartered Accountants or Certified General Accountants. ...
Bureaucracy is a concept in sociology and political science referring to the way that the administrative execution and enforcement of legal rules is socially organized. ...
Before the signing ceremony of the Sarbanes-Oxley Act, President George W. Bush meets with Senator Paul Sarbanes, Secretary of Labor Elaine Chao and other dignitaries in the Blue Room at the White House July 30, 2002. ...
The norm is for new companies, which are typically small, to be privately owned. After a number of years, if a company has grown significantly and is profitable, or has promising prospects, there is often an initial public offering and the company becomes public. An initial public offering (IPO) is the first sale of a corporations common shares to public investors. ...
Less common, but not unknown, is for a public company to pay cash to its shareholders and become private. This is typically done through a leveraged buyout. Public companies can also become private when purchased by a larger company that is private. A leveraged buyout (or LBO, or highly-leveraged transaction (HLT), or bootstrap transaction) occurs when a financial sponsor gains control of a majority of a target companys equity through the use of borrowed money or debt. ...
Trading and valuation The shares of a public company are traded on a stock exchange. The value or "size" of a public company is called its market capitalization, a term which is often shortened to "market cap". This is calculated as the number of shares outstanding (as opposed to authorized but not necessarily issued) times the price per share. For example, a company with two million shares outstanding and a price per share of $40 would have a market capitalization of $80 million. Market capitalization, often abbreviated to market cap, is a measurement of corporate size that refers to the current stock price times the number of outstanding shares. ...
See also The primary market is the financial market for the initial issue and placement of securities. ...
A public benefit corporation is usually a government-owned corporation that performs a specific, narrow function for the public good. ...
The initials plc after a UK or Irish company name indicate that it is a public limited company, a type of limited company whose shares may be offered for sale to the pubic. ...
Public ownership (also called government ownership or state ownership) is government ownership of any asset, industry, or corporation at any level, national, regional or local (municipal). ...
Tender offer is a term typically used in corporate finance to mean a public, open offer by an entity to buy stock from the existing stockholders of a publicly traded corporation under specific terms in effect for a specific period. ...
View up Wall Street from Pearl Street NYSE and Broad Street view from Wall Street Wall Street is the name of a narrow street in lower Manhattan running east from Broadway downhill to the East River. ...
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