Distinguish between a private company and a public company.

 Biggest difference; a public company has a responsibility towards it's shareholders. It has to give  periodical updates on how it's performing and disclose their books for the benefit of the public. They have to hold the shareholders' interests utmost and make a profit for them.

A private company on the other hand doesn't have to disclose their books to the general public, and it's basically run by the boss/bosses alone and he/she/they has/have no obligation to make  profit for their shareholders per se, which gives them the freedom to steer the company as they  see fit.

A good example would be Tesla and SpaceX. Founded and managed by the same person, Tesla is a public company, which means it has to make considered decisions and make sure the decision will benefit the company and shareholders financially. SpaceX on the other hand is private. And there's a reason for that; Elon Musk wants to go to Mars eventually and he knows that going public means he can't take risks or decisions that may be financially unproductive. He would have to ask for the majority shareholders permission whenever he wants to do something.

A publicly held company has shares that trade in the marketplace and those shares were issued by the company to raise $$$. Every public company began as a private company. Public companies have numerous reporting requirements and must hold a annual meeting to which every shareholder is allowed to attend. The value of the Public company is determined by the price at which its stock trades multiplied by the number of issued shares. Apple is an example of a publicly traded company.

Private companies are owned by a limited number of entities and do not have reporting requirements. They issue shares that con be sold back to the company or to another entity by negotiation. The company may limit the entities the shares may be sold to. Mars is an example of a privately held company. They do not have any shares that trade on the market and their value is not determined by their share price. Mars owns Mars candy as well as the Snickers brand, and other popular candy but also own a pet care line, food division, a drinks devision and they own a R&D division. They are one of the most valuable privately held companies.

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