A public company, a public joint-stock company (from the English public company ) is a joint-stock company whose shares are traded on the stock market freely, without restrictions [1] .
As a rule, the national legislation on the regulation of the stock market imposes certain requirements on the disclosure of information on companies whose shares may be offered for purchase to an unlimited number of persons and / or circulate in the stock market . Companies that fulfill these requirements are called public companies .
From the investor’s point of view, shares of a public company can be considered as a more liquid asset than shares of non-public companies for the following reasons:
- shares may be offered for sale to an unlimited number of persons;
- A potential buyer can rate a company from open (including independent) sources;
- shares of a public company are traded on an exchange where it is easier for the seller to find a buyer than on the unorganized market;
- Information on transactions made in an organized market (price and volume of transactions) is available in open sources to both the buyer and the seller and can be used as a basis for evaluating a package for sale.
A public company that is listed on a stock exchange but for any reason has ceased operations is called a shell company ( shell company ).
See also
- Private company
- Public corporation
Notes
- ↑ Raizberg B.A., Lozovsky L.Sh., Starodubtseva Ye.B. Public Joint-Stock Company // Modern Economic Dictionary. - 2nd ed., Corr .. - M . : INFRA-M, 1999. - 479 p.