A public listed company is one whose stocks are listed in one stock exchange or the other or in other words, a public listed company is one whose shares are issued in the market. The shares may be exchange traded or they may be traded in over the counter.
Advantages of listing in Public
The advantage of being a public listed company is that these companies need not ask for funds from financial institutions like Bank and borne the interest on the amount taken as loan. They can easily generate funds from the public by issuing securities (equity and debt). However, as they are listed in the stock exchange and to protect the interest and confidence of the investors, they need to get their company accounts audited on a regular basis by outside auditors and publish the audit report to their share holders. They has to incur some expenditure due to this. Apart from this, competitors also get access to various information which the company is bound to disclose to the general public.
Difference between Private and Public Listed Company :
| Parameters | Public listed company | Private listed company |
| Minimum no .of shareholders | 2 | 7 |
| Maximum no. of shareholders | No limit | 50 |
Great to know when investing in shares.
I read a lot of great articles about the stock market and shares on this website, but this really cleared up my knowledge of why you can buy shares in one company, but not another. Only some are publicly listed… which explains a lot!
Great to know you can also tell which companies have a good reputation for making money through shares and which ones don’t. For a newbie in the stock market, this article is invaluable and essential.