Privately Owned

AAA

DEFINITION of 'Privately Owned'

A company that is not publicly traded on a securities exchange. The majority of companies are privately owned, usually by either one individual or by a small group of individuals. Although offering securities for sale to the public can be a good way to obtain large amounts of financing, public ownership requires considerable effort to ensure compliance with securities regulations. Public ownership is generally impractical for small and medium-sized business.

INVESTOPEDIA EXPLAINS 'Privately Owned'

For a variety of reasons, ownership stakes in privately owned companies are often much more difficult to sell or transfer. Securities laws place higher restrictions on selling private ownership stakes, since dealing in these securities is often much more complex. For instance, accounting records may be inaccurate, unaudited, and/or not in compliance with Generally Accepted Accounting Principles.

RELATED TERMS
  1. Going Private

    A transaction or a series of transactions that convert a publicly ...
  2. Private Equity

    Equity capital that is not quoted on a public exchange. Private ...
  3. Management And Employee Buyout ...

    A restructuring initiative that involves both managerial and ...
  4. Private Company

    A company whose ownership is private. As a result, it does not ...
  5. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs ...
  6. Roll-Up Merger

    A rollup (also known as a "roll up" or a "roll-up") ...
Related Articles
  1. Mutual Funds & ETFs

    Private Equity A Trendsetter For Stocks

    In this article, we'll show you how private equity sets the trend for stocks everywhere.
  2. Mutual Funds & ETFs

    How To Invest In Private Equity

    Private Equity might be a pricey investment, but returns are on the rise and the payoff could be big.
  3. Entrepreneurship

    The 10 Greatest Entrepreneurs

    These 10 entrepreneurs' names will live on long into the future - perhaps even after their enterprises are gone.
  4. Options & Futures

    Why Public Companies Go Private

    Privatization can give management more time to make money for investors, but at what cost?
  5. Investing

    SPACs Raise Corporate Capital

    These public shell companies hold many advantages over private equity. Find out more here.
  6. Fundamental Analysis

    Private vs Public Equity: What's Best?

    What is the better way for a company to attract investors; by making its stock available for sale to whoever wants some, or by petitioning rich people?
  7. Charts & Patterns

    How To Become A Private Equity Associate

    With the right planning, second- and third-year investment banking analysts can graduate to an associate position at a private equity firm.
  8. Professionals

    Coming Soon: Private Equity In 401(k) Plans

    The day will soon come when private equity is commonly found among 401(k) plan investment options. Here's who's leading the charge and what to watch for.
  9. Entrepreneurship

    How Venture Capitalists Make Investment Choices

    In order to increase your odds for receiving funding, here are some criteria considered by venture capitalists.
  10. Investing Basics

    What Is Private Equity?

    This investment vehicle attracts wealthy investors to increase the value of portfolio companies.

You May Also Like

Hot Definitions
  1. Fixed-Charge Coverage Ratio

    A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. It is calculated ...
  2. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  3. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  4. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  5. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  6. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
Trading Center