Private Company

A private company is one whose equity (shares) is not available for purchase on public exchanges, although they may issue stock. This means that the company is owned entirely by the employees and investors, and the value is hard to derive exactly.

Private companies are not subject to as much regulation as public ones, for example they do not have to publish financial statements. Public companies may be privatized if an entity comes and purchases all the shares on the market so as to obtain full ownership of the company. A private company can become public through an IPO.

Free Resources

To continue learning and advancing your career, check out these additional helpful WSO resources:

• Retained Earnings
• Fraud Triangle
• Accounts Receivable Turnover Ratio
• Marginal Cost Formula
• Nash Equilibrium