What is a Closely Held Corporation? What is a Publicly Held Corporation?
The difference between a closely held corporation and publicly held corporations is that a publicly held corporation is owned by stockholders who buy and sell corporate shares on the stock market. A closely held corporation is owned by a close-knit group of shareholders that do not publicly trade their stock in companies. Learn more in our free legal guide below.
Get Legal Help Today
Find the right lawyer for your legal issue.
Secured with SHA-256 Encryption
UPDATED: Aug 16, 2022
asdfIt’s all about you. We want to help you make the right legal decisions.
We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.
UPDATED: Aug 16, 2022
asdfIt’s all about you. We want to help you make the right legal decisions.
We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.
On This Page
A closely held corporation, or private corporation, is one that is owned by private individuals who do not trade or sell their shares of ownership. This is in contrast to publicly held companies. Typically, closely held corporations are not subject to the same stringent reporting requirements as most public corporations.
Table of Contents
What is a closely held corporation?
The biggest difference between close or closely held private companies and publicly held or traded companies is that a closely held corporation has a tight-knit group of shareholders that make up the ownership committee for the business, while a publicly held corporation is one that is owned by stockholders.
Publicly Held Companies
In a publicly held business, the ownership shares of the corporation are traded publicly on the international stock market.
A publicly held company is owned and valued by the worth of its stockholders. People purchase shares of the company in the hope that the company will increase its net worth so that their shares end up being worth more than they were when they purchased them.
It is easy to assess the value of a publicly held company. In addition, selling and buying shares is as simple as placing an order with any broker or brokerage firm.
Private Corporations
The private corporation, on the other hand, is owned fully by shareholders that do not trade or sell their stock in the company unless they are opting to sell out their portion of ownership in the business to other owners.
The corporation’s bylaws usually give the first option to purchase these shares to the other shareholders before they are offered to anyone else as a means of “buying in” to the company. Valuing a closely held company is also much more difficult since there is no general marketplace for its sale.
Find the right lawyer for your legal issue.
Secured with SHA-256 Encryption
Find the right lawyer for your legal issue.
Secured with SHA-256 Encryption
Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.