What is a public corporation?

Public society is a corporation that its own public, based on its purchased shares owned by an open market. Public corporations sell shares in their possession because a large amount of capital can be obtained very quickly with a public offer. In the United States, Many Aspects of A Public Corporation's Operations, Especially ITS Relationship with Its Sharoholders, Are Closely Scrutinized and Regulated by the Securities and Exchange Commission (SEC) Response to the Great Depression, the regulation the Stock Markets and Prevent Abuses by Corporations. Incorporation is a legal process provided by the company an official legal personality. Corporations can therefore be characterized as a fictional person, and a legal person, or a moral person, , as the antid is to a natural person. However, they do not have to vote and are not expected to sit on the juries, even if they are taxed.

Three features common to any incorporated company is that the management is entrusted to the Board of Directors, ownership is shared among those who have contributed to the company's capital and that ownership can be replaced by sales or transfer of shares. However, only shares of public can be sold in the open market.

As soon as the company is incorporated, the company must then apply for SEC approval to offer its shares to one of the main stock exchanges. When grant approval, shares sell the company to the public in an initial public offer ("IPO"). The proceeds from the Sales on IPO return to the company, which is the reason for selling shares in the first place; Many IPOs have received billions of US dollars (USD) for corporations that issue them. The following sales of the company's shares is oBeskily between investors and none of the money involved in these transactions is not refundable to corporation. Many corporations retain ownership of some of their shares to sell on the future date to raise money.

While the public corporation sells shares in its possession to quickly obtain money, the public usually purchases these shares in anticipation of investment over time. This can happen in two different ways. The first is the valuation of the shares price and Emdash itself; The company's share price reflects its wealth on the market and Emdash; And when the company is doing well, its reserves generally increase in value. The second is the expectations of dividends and Emdash; Regular payments many companies to their shareholders. These payments are determined by the Board of Directors of the Company and are based on the performance of the company.

While shares of shares in any public corporation can regularly decrease values, shares ownership in general, and especially from a portfolio consisting of many different shares, usually consideredFor safe long -term investments, because in the past, such investments have worked very well over time over time.