Distinctions Between Public And Private Companies - SS2 Accounting Lesson Note
Public companies have a wider ownership base, greater liquidity, and more regulatory oversight, while private companies have more control over their operations and greater privacy. Public and private companies differ in several key ways, and they include:
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Ownership: Public companies are owned by a large number of investors who hold shares in the company, while private companies are owned by individuals or a small group of investors who hold shares in the company.
Public Trading: Public companies are publicly traded on a stock exchange, which means anyone can buy and sell shares of the company, while private companies are not publicly traded on a stock exchange.
Disclosure Requirements: Public companies are required to disclose financial and operational information to the public, while private companies are not required to do so.
Regulation: Public companies are subject to a wide range of regulations and reporting requirements from government agencies and stock exchanges, while private companies have fewer regulatory requirements.
Capital Raising: Public companies can raise capital through public offerings of shares, as well as through private investment and loans, while private companies can only raise capital through private investment and loans.