In recent years certain ubiquitous enterprises have “gone public” and have made their debuts on the stock exchange. However, for individuals in New York who are outside of the corporate world, the distinction between a private company and public company may not be clear.
Put simply, a private company is one that is held and controlled by a small number of people. A family business may be privately held, as may a bigger enterprise that is financed and managed by an individual or team of partners. In contrast, a public company is one in which many people may own shares of its worth and serve as stakeholders in the enterprise’s management.
When an entity goes public it offers to the public the opportunity to buy shares of it in exchange for some control over how the entity is run. When the entity makes financial gains, shareholders may see the value of their ownership shares increase. When important corporate decisions must be made shareholders may have a voice in what happens with the entity.
Taking a private business public can be an overwhelming and complex legal process, with many steps that must be completed and regulations that must be satisfied. Individuals who are interested in exploring this option for their own enterprises are encouraged to discuss the advantages and disadvantages of doing so with their business law attorneys. Not every business enterprise is well-suited to a public offering and individuals may be able to avoid some problems if they do their research before taking the journey down this path.
