What is the difference in Public and Privately held Companies?
Privately held companies are owned by one person, a family, or a small group of investors. There are no shareholders to answer to and the company is not required to file disclosure statements with the SEC (Securities and Exchange Commission). The disadvantage to being a privately held company is that it must turn to private investors or commercial loan institutions when it needs a large amount of capital. Private companies are not required to disclose their financial situation to anyone and are not subject to oversight by the SEC. Because they are privately held, investors are not able to purchase stock or invest in the company. The owners or their hired representative(s) usually manage privately held companies with the assistance of managers and supervisors as dictated by the structure and goals of the company. Publicly held companies are those that have opened themselves up to the shareholder market by selling a portion of the company to smaller investors. The amount of the investmen
