Private vs. Public Company: An Overview

A private company is held in private hands. The company is owned by its founders, management, and/or a group of private investors in most cases. The public isn’t privy to its busi💯ness.

A public company is one that's sold a portion of itself to the public via an 澳洲幸运5开奖号码历史查询:initial public offering (IPO). Shareholders have a claim to part of the company’s assets and profits. Public disclosure of business and financial activities and performance is required of public companies.

Both private and public companies can contribute ꧋to the financial health and well-being of economies and nations through their business activiti🍷es, employment opportunities, and building wealth.

Private Companies

A popular misconception is that privately held companies are small and of little interest. Many big-name 澳洲幸运5开奖号码历史查询:companies are privately held, however, including Mars, Cargill, Fidelity Investments, and Koch Industries.

Ownership

Private companies are owned by those who establish them and those who are invited to invest in them. The public at large can't buy shares or otherwise invest in private companies at their discretion.

Privacy

They’re not owned by the public so private companies’ executives and management don’t have to answer to stockholders or provide any company information to the public. They aren’t required to file 澳洲幸运5开奖号码历史查询:disclosure statements with the 澳洲幸运5开奖号码🐎历史查询:Securities and Exchange Commission (S🐻EC).

Capital for Growth

A private company can’t use public capital markets to raise funds when it needs money. It must turn to private funding. Private companies fund their growth with profits from operatiﷺons and/or by borrowing money from banks, venture capitalists, or other types of investors.

A privately held company can’t rely on getting cash by selling stocks or bonds in public markets but it may still be able to sell a limited number of shares under 澳洲幸运5开奖号码历史查询:Regulation D without registering with the SEC. Private companies can use shares of equity to attract 澳洲幸运5开奖号码历史查询:investors in this way.

Public Companies

A public company is usually a very large business entity and is normally listed and traded on a public exchange. These exchanges require public companies to meet certain standards to continue trading publicly. The New York Stock Exchange requires that a public company maintain a market capitalization of $15 million.

Ownership

A public company's stock shares can be bought and sold by people outside the company after the shares trade on public stock markets. The company is therefore owned by those within the organization who possess shares of company stock and by members of the general public. Members of the public who own shares have a stake in the company as a result. Company management can be influenced by their opinions regarding the company’s business.

Public Disclosure

A public company is required to disclose certain business and financial information regularly to the public. This information includes annual reports, quarterly reports, and current reports such as 10-K, 10-Q, and 8-K forms that are filed with the SEC.

Capital for Growth

A significant advantage that publicly traded companies have is their ability to tap the financial markets for needed capital for expansion through mergers and acquisitions, for internal projects༒ that can drive profits and growth, or for other nee♍ds. They do this by selling stock (equity) or bonds (debt).

A public company might issue bonds that investors purchase. Investors make loans toജ the company in this way. The company will have to repay these loans with interest but it won’t have to surrender any shares of ownership in the company to the investor.

Bonds can therefore be a good option for public compa🀅nies that seek to raise money, especially in a depressed stock market. A company could also raise capital by selling additional shares, however. This may relieve the burden of repaying bo෴nds.

Key Differences

Public and private cꦯompanies are distinctly different in several ways.

Company Ownership

Private companies are owned by their founders, executive management, and private investors. Public companies are owneꦦd by members of the public who purchase compa🍃ny stock as well as personnel within companies such as founders, managers, and employees who possess shares of company stock as a result of the IPO and purchases.

Public company shareholders who aren't involved in the company in any way other than share ownership can have an impact on the management and operations of public companies because they're entitled to a say.

Sources of Capital

Private companies normally obtain needed capital from private sources such as their shareholding owners or private investors such as venture capitalists. They can also raise funds by ta♛king loans from financial institutions.

Public companies obtain needed capital by selling shares in the 🔯public marketplace or by issuing debt. This makes capital easier to obtain for public 𝔍companies compared to private companies.

Public Disclosure

Public companies are required by the SEC to regularly inform shareholders and the public of their financial activities, business activities, and business results. They must file periodic reports and other materials with the government.

Private companies aren’t required to make their company information public or register with the SEC although legislation has been introduced in the U.S. Senate to require some to do so.

Welcome and unwelcome news about public companies is regularly rep🉐orted by the press and other media. Private companies typically don’t experience such publicity.

Examples of Private vs. Public Companies

The 10 largest private companies as of 2024 measured by revenue:

1. Cargill, $160 billion
2. Koch Industries, $125 billion
3. Publix Super Markets, $57.1 billion
4. Mars, $50 billion
5. H-E-B, $46.5 billion
6. Reyes Holdings, $40 billion
7. Enterprise Mobility, $38 billion
8. C&S Wholesale Grocers, $34 billion
9. Fidelity Investments, $28.2 billion
10. Southern Glazer’s Wine & Spirits, $26 billion

The 10 largest public companies as of April 2025 measured by 澳洲幸运5开奖号码历史查询:market capitalization:

1. Apple, $2.97 trillion
2. Microsoft, $2.88 trillion
3. NVIDIA, $2.69 trillion
4. Amazon, $1.95 trillion
5. Alphabet (Google), $1.91 trillion
6. Saudi Aramco, $1.67 trillion
7. Meta Platforms (Facebook), $1.37 trillion
8. Berkshire Hathaway, $1.12 trillion
9. Broadcom, $844.5 billion
10. TSMC, $814.3 billion

The Bottom Line

Private and public companies can contribute to the economic health and financial well-being of their communities, states, and nations. Both types of companies broadly operate businesses to earn ♎revenue and make profits but they differ in ownership, public disclosure needs, government oversight, and access to capital.