digplanet beta 1: Athena
Share digplanet:


Applied sciences






















A privately held company or close corporation is a business company owned either by non-governmental organizations or by a relatively small number of shareholders or company members which does not offer or trade its company stock (shares) to the general public on the stock market exchanges, but rather the company's stock is offered, owned and traded or exchanged privately. More ambiguous terms for a privately held company are unquoted company and unlisted company.

Though less visible than their publicly traded counterparts, private companies have major importance in the world's economy. In 2008, the 441 largest private companies in the United States accounted for $1.8 trillion in revenues and employed 6.2 million people, according to Forbes. In 2005, using a substantially smaller pool size (22.7%) for comparison, the 339 companies on Forbes' survey of closely held U.S. businesses sold a trillion dollars' worth of goods and services (44%) and employed 4 million people. In 2004, the Forbes' count of privately held U.S. businesses with at least $1 billion in revenue was 305.[1]

Koch Industries, Bechtel, Cargill, Publix, Pilot Corp., Deloitte Touche Tohmatsu (one of the members of the Big Four accounting firms), Hearst Corporation, S. C. Johnson, and Mars are among the largest privately held companies in the United States. KPMG, the UK accounting firms Ernst & Young and PricewaterhouseCoopers, IKEA, Trafigura, J C Bamford Excavators (JCB), Lidl, Aldi, LEGO, Bosch, Rolex and Victorinox are some examples of Europe's largest privately held companies.

State ownership vs. private ownership[edit]

In the broadest sense, the term private corporation refers to any business not owned by the state. This usage is often found in former communist countries to differentiate from former state-owned enterprises,[citation needed] but it may be used anywhere when contrasting to a state-owned company.

In the United States, the term privately held company is more often used to describe for-profit enterprises whose shares are not traded on the stock market.

Ownership of stock[edit]

In countries with public trading markets, a privately held business is generally taken to mean one whose ownership shares or interests are not publicly traded. Often, privately held companies are owned by the company founders and/or their families and heirs or by a small group of investors. Sometimes employees also hold shares of private companies.[2] Most small businesses are privately held.

Subsidiaries and joint ventures of publicly traded companies (for example, General Motors' Saturn Corporation), unless shares in the subsidiary itself are traded directly, have characteristics of both privately held companies and publicly traded companies. Such companies are usually subject to the same reporting requirements as privately held companies, but their assets, liabilities and activities are also included in the reports of their parent companies, as required by the accountancy and securities industry rules relating to groups of companies.

Form of organization[edit]

Private companies may be called corporations, limited companies, limited liability companies, unlimited companies, or other names, depending on where and how they are organized and structured. In the United States, but not generally in the United Kingdom, the term is also extended to partnerships, sole proprietorships or business trusts. Each of these categories may have additional requirements and restrictions that may impact reporting requirements, income tax liabilities, governmental obligations, employee relations, marketing opportunities, and other business obligations and decisions.

In many countries, there are forms of organization which are restricted to and are commonly used by private companies, for example the private company limited by shares in the United Kingdom (abbreviated Ltd) or private unlimited company and the proprietary limited company (abbreviated Pty Ltd) or unlimited proprietary company (abbreviated Pty) in Australia.

Reporting obligations and restrictions[edit]

Privately held companies generally have fewer or less comprehensive reporting requirements and obligations for transparency, via annual reports, etc. than publicly traded companies do. For example, in the United States, unlike in Europe[where?], privately held companies are not generally required to publish their financial statements. By not being required to disclose details about their operations and financial outlook, private companies are not forced to disclose information that may potentially be valuable to competitors and can avoid the immediate erosion of customer and stakeholder confidence in the event of financial duress. Further, with limited reporting requirements and shareholder expectations, private firms are afforded a greater operational flexibility by being able to focus on long term growth rather than quarterly earnings. In addition, private company executives may steer their ships without shareholder approval, allowing them to take significant action without delays.[3][4] In Australia, Part 2E of the Corporations Act 2001 requires that publicly traded companies file certain documents relating to their annual general meeting with the Australian Securities and Investments Commission. There is a similar requirement for large proprietary companies, which are required to lodge Form 388H to the ASIC containing their financial report. In the U.S., private companies are held to different accounting auditing standards than are public companies, overseen by the Private Company Counsel division of FASB.[5]

Researching private companies and private company financials can involved contacting the Secretary of State for the state of incorporation (or for LLC or partnership, state of formation), or using specialized private company databases such as Dun & Bradstreet [6] or PrivCo [3] Other companies, like Sageworks, provide aggregated data on privately held companies, segmented by industry code.[7]

Privately held companies also sometimes have restrictions on how many shareholders they may have. For example, the U.S. Securities Exchange Act of 1934, section 12(g), limits a privately held company, generally, to fewer than 2000 shareholders, and the U.S. Investment Company Act of 1940, requires registration of investment companies that have more than 100 holders. In Australia, section 113 of the Corporations Act 2001 limits a privately held company to fifty non-employee shareholders.

Privately owned enterprise[edit]

A privately owned enterprise refers to a commercial enterprise that is owned by private investors, shareholders or owners (usually collectively, but they can be owned by a single individual), and is in contrast to state institutions, such as publicly owned enterprises and government agencies. Private enterprises comprise the private sector of an economy. An economic system that 1) contains a large private sector where privately run businesses are the backbone of the economy, and 2) business surplus is controlled by the owners, is referred to as capitalism. This contrasts with socialism, where industry is owned by the state or by all of the community in common. The act of taking assets into the private sector is referred to as privatization. The goal of private enterprise differs from other institutions, the major difference being private businesses exist solely to generate profit for the owners or shareholders.[8]

A privately owned enterprise is one form that private property may take.

Types of privately owned business[edit]

  • Sole proprietorship: A sole proprietorship is a business owned by one person. The owner may operate on his or her own or may employ others. The owner of the business has total and unlimited personal liability of the debts incurred by the business. This form is usually relegated to small businesses.
  • Partnership: A partnership is a form of business in which two or more people operate for the common goal of making profit. Each partner has total and unlimited personal liability of the debts incurred by the partnership. There are three typical different types of classifications for partnerships: general partnerships, limited partnerships, and limited liability partnerships.
  • Corporation: A business corporation is a for-profit, limited liability or unlimited liability entity that has a separate legal personality from its members. A corporation is owned by multiple shareholders and is overseen by a board of directors, which hires the business's managerial staff. Corporate models have also been applied to the state sector in the form of Government-owned corporations. A corporation may be privately held (that is, close - that is, held by a few people) or publicly traded.

See also[edit]


  1. ^ "Forbes.com". Forbes.com. Retrieved 2012-03-06. 
  2. ^ Loewen, Jacoline (2008). Money Magnet: Attract Investors to Your Business: John Wiley & Sons. ISBN 978-0-470-15575-2.
  3. ^ a b PrivCo.com, Private Company Knowledge Bank.
  4. ^ Library of Congress, Private company research.
  5. ^ [1]
  6. ^ D&B.
  7. ^ Fox Business Description of Sageworks Industry Data
  8. ^ Ownership Society. Cato.org. Retrieved on 2010-11-16.


External links[edit]

Original courtesy of Wikipedia: http://en.wikipedia.org/wiki/Privately_held_company — Please support Wikipedia.
This page uses Creative Commons Licensed content from Wikipedia. A portion of the proceeds from advertising on Digplanet goes to supporting Wikipedia.
53312 videos foundNext > 

Protect Your Privately Held Company's Value: Twelve Timely Ideas & Strategies

webinar presented by Reinhart attorneys discussing ideas to protect your privately held company's value such as: Topics include: • Common Structures for Capi...

Audited Financial Statements for Privately Held Companies

Audited Financial Statements for Privately Held Companies Call Neil D Rischall CPA @ (866) 559-6434 or Email cpa@post.com for help in meeting deadlines and m...

D&O Insurance for a Privately Held Company, Part I

D&O Insurance is an important coverage for all privately held companies. This is a brief summary of the coverage the policy provides and why you should consi...

Inc 500 Magazines #1 Fastest Growing Privately Held Company as of 9 20101

D&O Insurance for a Privately Held Company, Part 2

Employment Practice Liability insurance and Fiduciary Liability insurance are two important parts of a D&O policy for a privately held company.

How to sell a privately held business or company - Jacksonville Florida

http://sellyourbusinessflorida.com/selling-your-business/ - Learn how to sell a privately held business or company. Common questions are answered. To schedul...

EpiConcept a privately held company

Dr. Alain Moren, head of the Epidemiology department at EpiConcept responds to the question, "EpiConcept is a private 'for profit' company, no?"

Privately held company

A privately held company or close corporation is a business company owned either by non-governmental organizations or by a relatively small number of shareho...

NASDAQ Finally Launches Its Market For Privately-Held Companies

Just as the JOBS Act kickstarts bigger markets for shares of privately-held companies, NASDAQ is launching its own entrant in the field. The U.S. stock excha...

Stocks, Bonds & Investments : How to Invest in a Privately Held Company

Invest in a privately held company by brokering a deal with the owners of the company to work out what type of investment the company needs. Find a privately...

53312 videos foundNext > 

2357 news items

Greenville News
Wed, 20 Aug 2014 08:00:00 -0700

Mannan Pharmaceuticals is a privately held company. It had been considering locations nationwide before deciding to open at ITOR, company officials said. Mannan said it expects to add up to three associates in 2014 and then continue to grow and expand ...
Businessinsider India
Thu, 21 Aug 2014 04:48:45 -0700

Dr. Kent Brantly, who had contracted the ebola virus in Liberia, was released from Atlanta's Emory University Hospital after being treated with experimental drug ZMapp. ZMapp was developed by Mapp Biopharmaceutical, a privately held company. It's not ...
SYS-CON Media (press release)
Wed, 20 Aug 2014 08:56:15 -0700

HighPoint is among the top five, and one of the fastest growing constituent services providers to the Federal government. HighPoint is a privately held company founded in 2006 and headquartered in Indianapolis with offices in Baltimore and Reston ...
Wed, 20 Aug 2014 15:07:30 -0700

A decades-long family feud, which brought about the ouster of Arthur T. Demoulas as CEO of the privately held company, led to a worker revolt, customer boycotts and empty shelves in the grocery chain's stores in Maine, Massachusetts and New Hampshire.
Rock Hill Herald (press release)
Wed, 20 Aug 2014 12:41:15 -0700

... $59 billion of assets under management, Envision is part of a group of healthcare management companies owned and operated by Envision Pharmaceutical Holdings LLC (EPH), a privately held company with consolidated revenues in excess of $4 billion.
Minneapolis / St. Paul Business Journal
Wed, 20 Aug 2014 09:19:12 -0700

I believe now is the right time for a new CEO to take UHS forward as a leader in health care technology management and service solutions,” Blackford said in a statement. Blackford, who has been with the privately held company for 12 years, is also ...


Wed, 20 Aug 2014 07:03:45 -0700

Highland Pellets is a privately held company with industry veterans from the wood pellet, finance, and energy markets. Wood pellets are a sustainably sourced feedstock for use by European industrial utilities to lower their carbon footprint and provide ...
Business Insider
Thu, 21 Aug 2014 04:18:18 -0700

Who Makes ZMapp?!?! ZMapp was developed by Mapp Biopharmaceutical, a privately held company. It's not to be confused with MAP Pharmceuticals, which was acquired by Allergan in 2013. Oddly, Tekmira Pharmaceuticals, which also has an experimental ...

Oops, we seem to be having trouble contacting Twitter

Talk About Privately held company

You can talk about Privately held company with people all over the world in our discussions.

Support Wikipedia

A portion of the proceeds from advertising on Digplanet goes to supporting Wikipedia. Please add your support for Wikipedia!