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. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs ...
  5. Private Company

    A company whose ownership is private. As a result, it does not ...
  6. Roll-Up Merger

    A rollup (also known as a "roll up" or a "roll-up") ...
RELATED FAQS
  1. How does investing in the airline industry differ for privately versus government ...

    Airlines with significant private ownership typically offer different opportunities to investors than government-owned companies. ... Read Full Answer >>
  2. What is the difference between a summary prospectus and an offering memorandum?

    All securities offered to investors in the United States are required to comply with the anti-fraud provisions of federal ... Read Full Answer >>
  3. What are the major differences between investment banking and private equity?

    Private equity and investment banking both raise capital for investing purposes but tend to do so in very different ways. ... Read Full Answer >>
  4. What are some advantage of raising capital through private placement?

    Small businesses face the constant challenge of raising affordable capital to fund business operations. Equity financing ... Read Full Answer >>
  5. How are leveraged buyouts financed?

    A leveraged buyout (LBO) is a transaction in which the buyer borrows a significant portion of the requisite funds to purchase ... Read Full Answer >>
  6. What are the different equity financing options available to companies in the United ...

    Finding and attaining affordable financing is an ongoing challenge for most businesses within the United States. Debt financing ... Read Full Answer >>
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. Brokers

    Private Equity's Returns Are Tempered By Its Risks

    Private equity firms adopt approaches to quickly hike up earnings and boost returns, but these investments come with big risks too.
  7. Entrepreneurship

    The Risk And Rewards Of Investing In Startups

    Investing in startups is a very risky business but can reward investors greatly if and when they do pay off.
  8. Investing

    Top Alternative Investments To The Stock Market

    Dislike the stock market or want greater diversity? Here are some alternatives.
  9. 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?
  10. 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.

You May Also Like

Hot Definitions
  1. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  2. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  3. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  4. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  5. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center