Public Company vs Private Company - Find Out the Best Differences! - YouTube

Hello everyone welcomes to the channel of wallstreetmojo to know more about this video public company

vs private company watch the video till the end and if you are new to this channel

then you can subscribe us by clicking the bell icon that's given below welcome everyone and

today we have a fantastic topic to learn what we are going to do in this topic we have couple

of things well we are going to learn the differences between the public and private company near like

the definition how it is stated on the regulations, advantages, what are the sizes, how does sources

of the fund comes for public and private companies and we are going to study you know some of the theoretical

basis like you know how public and private company goes a comparative analysis also will

be part of this particular session which will include a clear difference between both of them

and you know last topic that we can discuss over here in this is no can a private company

be a public company near future or probably the vice-versa scenario. Let's begin the topic well

the public vs private company this is the topic see public and private

company both can be huge. It's just the way to source funds are different now the public company

takes the help of the general public and it loses out on the ownership and they need

adhere to regulations of SEC probably

SEBI in India SEBI in India. So the private companies probably the take the help of

of the what we called as the private

investors and all the regulations or the investors are taken into account and they

can take the help of the venture capital and they do not need to disclose any company information

to the general public well lets start and discuss there are many differences between

the public vs private company let's have a look at them one by 1 first point of difference

that we are going to study is what we called as the point first let me write here

what is going to be the point of difference and here will be public company and here will

be private company this will be the end let's discuss from the infographics if you start

over here with the help of the infographics will start public company. A public company

can sell its registered shares to the general public so basically how does a public company

works let the company was operating private for a couple of years now they want to go

out in public and say ok a business model is good we have a good revenue cash flows

would you like and come join hands with us put some money in our business and we can

synergize in make business grow. So basically companies is going out to public for money

lend money to the company in its not loan but it's a sort of the return is that is dividend

that is been paid. So that what public companies all about when we talk about the private company a private

company can sell it's own privately health share to few willing investors. Now privately held share over here

privately held shares over here probably mean the like you now VC the venture capital or probably

angel investors or you now the MF funds holders so on and so forth. They don't go there are not the people

from outside public in large those are the big investors and those investor want to take

a stake in the company so when they won't take a stake in the company they really need

to realize that you know how much things will go about so we see VC, AI and MF they take a significant

portion in the company and that's why it's so VC, AI and MF they take significant

significant portion in the company and that's why they are known as a private company now

where exactly they are traded on the public company and private company the public company the

stocks of the public company are traded on the stock exchanges ok they are traded on

the stock exchange there is a stock exchange like you know New York stock exchange probably

India Bombay Stock Exchange or NSE National Stock Exchange it is traded traded means

on day-to-day basis there is some activity that is going on there is buy and sale of

shares in the secondary market and the prices go up and down based on the demand and the

performance probably the volatility a company is showing in terms of growth

numbers in terms of there

financial results and so on and so forth the probably they may have come

out with some good news probably regarding this are the expansion plans on the company

has got this tender the company has got this project

based on which the prices go up and down and based on that the investors they buy and sell

and they probably take call on that. These are private company stocks are owned and they traded only

by few private investors you now it's not general public at large like in you know stock exchanges where

the country now who are the regulation who are the regulator is who are regulating this company

many cases public company there is a regulatory you know the reg issuance

other reg Institutions who handles this kind of companies because they need

to take into account the amount the risks

that is involved because it's public money that is understake so they need to be really very smart

on that particular aspect and public company has to that lot of regulations on reporting

standards sum of the noms, some criteria the legal aspects of the SSC the private

company until the private company

reaches to 10 million dollar and more than 500 shareholders it does not have to follow any

any regulation issued by the a SEC so here we are trying to say that you know all the private

company, until and unless it doesn't reaches to $10 million or more than 500 shareholders

that is small or probably the private equity shareholders. There is VC's it doesn't

have to comply anything with SSC is so there is no reg issues issuance , there is no followance

of regular submissions of your and accounts financial statements and so on and

so forth so that board and is reduced from the head of private company if they are

within the limit of threshold of 10 million or 500 shareholders this are the two conditions that need

to be satisfied has the SCC and that's securities change combination what are

the advantages will for the public and the private company for public

company the primary advantages publicly traded is that it can tap into market by selling

more shares it can it can tap in the market by selling more and more shares you can get more money

and probably after one. There is also a straight line where they cannot cross beyond that.

Well so issuance can be done and you can receive money from the shareholders nowhere the primary

advantage of the private traded company is that it does not need to answer to any stockholders,

any stakeholders probably any reassurances

is there is no need for disclosure stockholder

is basically the people who are buying the stock which happens in the public company not in

the private company private company is been just for the probably just in the BES

so they need to give the reports for probably the financial statement of the performances company

to the people who have invested in the company and for the issuances is its not regulations

it's just a kind of answer to the stakeholders but there is no sort of regulatory compliances

that private companies need adhere to .Well the size public company public-

traded companies are big massive companies

big capital and the lot of risk return trade-off that is involved. When

comes to private company private traded company can also be big companies are

undoubtedly it's just the way of raising some money same amount of the

money can be raised in the private company with help of the big investors and without even following

all the rules probably the raise the ideas is that the privately held company is

smaller is totally false I would and have would and see that

that in a small because again depends upon what is the amount of the capital that is been deployed in private

company in the case public companies is less in the a private company more so deployment is very important

thing, when we come to the source of the funds, is the last differences in source

of the funds that we discussing is that in you know in public

company for public companies source of the funds is is basically selling

of the shares and probably on bonds can be the rights issues in

any other are the QIP otherways by which probably companies can raise funds

when it comes to the private

company for privately trade in the company to the source of the funds is few private

investors probably with venture capital is take to the accounts the entire trade so

after discussing all this I want you to know first what is public company it can sell his

own registered shares in the registered securities to the Chand Public on large after then IPO

company becomes the public company and public company can also be turned term

has the public traded company and

public traded company means that the company can trade in public capital

markets and can directly sell its shares to public so as per the US SEC the security exchange

commission if company has 10 million in an assets over the 500 subscribers the company

has to register with SSC need to follow all the reporting standard rules regulation that

it need to comply with so the shares of the public company are shared by the shareholders

the board of directors the management and company becomes a public to general to generate

more capital for business why are the public and as a result so they can expand they reach

and the market what is the private company well in case of private company private companies

in like public company and private company can trade in on shared among the general public

and share is a private company or not traded on the public stock exchange so that doesn't mean

that private company don't have shares used informed you ok and there is none who

can own them so private companies the shares or owned by the private limited by only if you willing

investor so private company is run in the same way of public companies on the only difference

in the case is the private company the number of the shares traded is relatively you can say

smaller okay let us relatively smaller in

the only difference in the case of private company number of shares

its small and also traded shares at home by the Limited individuals now in case of

private company is the capital is often is source to from the VC debenture capital is invest

in private companies is perfect for VC. As we look for the what we call as the higher risks

and high reward game show high-risk high reward high-risk high reward is what they are looking

for the private companies can go public if the feel at they need more capital to expand business

so for that they go for the IPO that initial public offer and issue shares to external public

or public company can also transform itself into private company and the help of the help of the

PE firm. Now what is the comparative analysis comparative analysis just what we learn is the point of

difference the definition OK then where exactly it is traded on what are the regulation it

needs to comply what were the advantage that both have the size is what we refers

and finally the sources of

the funds now my another question

over here is that can a private company bee a public company in the near future see answer to

the both of the cases resounding yes see a private company can be public company by

conducting and IPO okay so possible and they can issue shares to the general public on the other

hand the public company if you see I can transform itself into the private company it can be often

have the public company wants to remain in the few investors only so to do possible

so to do this they higher

PE firm

and PE firm by the major portion of the outstanding shares in the company

and request the SSC to delist okay the company from the stock exchanges

I hope you have got a fantastic idea

regarding how the whole process works if you have learn and like

watching this video please like comments on this video

and subscribe to channel for all the latest updates once again thank you. Thankyou for joining the video.