Types of Companies - Private Company: Definition And Features - SS2 Accounting Lesson Note
A private company is a type of business organization that is privately owned and is not publicly traded on a stock exchange. This means that the ownership of the company is limited to a small group of individuals, typically the founders, their families, and a small number of investors. Some of the key features of a private company include:
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Ownership: Private companies are owned by individuals or a small group of investors who hold shares in the company.
Limited liability: Shareholders of a private company have limited liability, meaning their personal assets are protected in the event of business liabilities or debts.
Management: Private companies are typically managed by the owners or a small group of appointed executives. They are not subject to the same level of public scrutiny or regulations as publicly traded companies
Financing: Private companies can raise capital through private investment, loans, or other means, but they cannot sell shares to the public.
Privacy: Private companies are not required to disclose financial or operational information to the public, which allows them to maintain a high level of privacy and confidentiality.