Privately Owned

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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.

BREAKING DOWN '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.

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RELATED FAQS
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    Airlines with significant private ownership typically offer different opportunities to investors than government-owned companies. ... Read Full Answer >>
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    It is common to see a private equity investment's net asset value, or NAV, referred to as its residual value, since it represents ... Read Full Answer >>
  3. How much, if any, influence do non-controlling interest shareholders have?

    Non-controlling interest shareholders do not typically have much influence. The level of influence can vary, however, depending ... Read Full Answer >>
  4. What are the pros and cons of holding a non-controlling interest in a company?

    Most investors hold a non-controlling interest – also known as a minority interest – of the companies in which they own shares. ... Read Full Answer >>
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    Similar to public companies, private companies also need funding for various reasons. A business typically needs the greatest ... Read Full Answer >>
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