What is a public company?
Public company is an organization that originally offers stocks on the public market and leads trading on an open market. These companies are managed by shareholders who own a percentage of the company on the basis of the number of shares they have. Many advantages and disadvantages to become a public company must be carefully considered before the owners decide to publish.
In a private company, the company is usually owned by the company's founder. Partial ownership can be awarded to business partners, main investors or even employees at the discretion of the founder. In a public company, the company owns the company regardless of history or relationship with the company before purchasing shares. Shareholders can decide what to do with the company through votes, and each shareholder was provided with a percentage of ownership proportional to the amount of shares owned.
Many companies decide to publish as a way to raise more money for operations or expansion. By selling some societyThe shareholders may allow the acquired capital to continue operation or create a small enterprise in one place. The disadvantage of becoming a public company is that the original owner loses power and the ability to act independently; In some cases, if another shareholder buys most of the company, the original owner can be completely pushed out of power.
One of the main disadvantages to become a public company is increased financial publication. Private companies often benefit from being able to maintain confidential financial information because it prevents competitive businesses from obtaining fundamental information about how the business operates. Public companies are subject to extensive government regulation and usually have to publish most of the financial records. Although it helps to maintain fraud down, it can be a harmful market in competition.
as a company with shares traded on an openThe stock market is also subject to the widely variable market behavior. Even a successful company can end up in trouble because of a market that sends investors who throw themselves away. Public society can be very beneficial on a strong market, as healthy profits and confidence of consumers can increase stock costs that help increase capital for the company.
It is also possible for public society to reverse this process and become private. If the owner or directors of the company buy back all available shares, they will again become the main power behind the company. This process, known as privatization, may also occur if all shares of a public company buy another private company.