Definition of Private Company



The private companies are owned by private parties and the general public has no ownership in it. The companies are incorporated but are not listed on public exchanges like New York Stock Exchange for example. The ownership is limited to a small group of people mostly family business owners. The shares are not issued to the general public and are in fewer hands, that is why they are not highly liquid.

 


One great disadvantage is that the private companies do not have access to public funds like the public listed entities do. However, private companies are not required to follow strict filing requirements of the security and exchange commission.


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