What Happens When a Private Society Goes General?
You hear it all the lifetime in the material: "ABC Partnership Goes General." On the other hand what prerrogative does it niggard? By opening its shares to the common, going common completely changes how a convention operates.
Private Company
Companies day one as private companies, receiving investments from individuals and attempt capitalists. Private companies can detain their financial longitude private, so the regular and gathering employees single be read what owners speak.
Public Company
When a gathering is universal, any person can buy a share of that company on a public stock exchange.
Advantages of Going Public
Going public strengthens a company's capital base, makes acquisitions easier, increases access to debt markets and diversifies ownership.Disadvantages of Going Public
The investment bank, or underwriter, becomes legally responsible for the shares and sells them to the public.
IPO Requirements
To qualify for an IPO, private companies must have high growth prospects and innovative product(s) and/or service(s); meet revenue, profit and financial audit requirements; and be competitive in their industry.
Thus, the Securities and Exchange Commission requires public companies to reveal financial information through a public quarterly and yearly SEC filing.
Going Public
A company goes public when an investment bank approves the company for an initial public offering.Disadvantages include increased pressure on short-term growth, increased costs, increased restrictions on management and trading, disclosure of financial information and original company owners' loss of control in decision making.
