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Public Company

What is a Public company?

Public companies sell their shares on the open market, and the buyer becomes the company's shareholder and equity owner. Any private company that needed more funds and decided to go public must go through an initial public offering (IPO). The goal of an IPO is to raise funds for the issuing company by selling stock to the public.

Public companies must hold an annual general meeting (AGM) where shareholders can vote to elect new board members, discuss policies, and make new decisions that will affect how the company operates. The shareholders also get a slice of the company’s profits, which are distributed according to the number of shares they own.


Public Company Explained

A public company sells some or all of its shares to the public through an initial public offering (IPO). An IPO is a way for a private company to raise capital by offering its shares to investors who can trade them on a stock exchange. A public company must follow the rules and regulations of the stock exchange where it is listed. A public company can benefit from having access to more funds, but it also has to disclose more information and face more scrutiny from shareholders and regulators. Tata Motors, ITC, Wipro, and Bharti Airtel are examples of public companies.

Almost all public companies were once private; a private company is owned by a private group of owners, such as founders, management, or private investors. A private company does not trade its shares on a stock exchange and does not have to register with the stock exchange. A private company can have more control over its decisions and operations but must rely on private funding sources, such as bank loans, venture capital, or profits