How does a public company differ from a private company?

A public company is distinct from a private company primarily because it has its shares available for trading on a stock exchange. This characteristic provides public companies with greater access to capital through the sale of shares to the general public, which can facilitate significant business growth and expansion opportunities.

Being listed on a stock exchange also entails regulatory requirements, such as regular financial disclosures and corporate governance standards, which are not necessarily applicable to private companies. This transparency is beneficial for investors, as it allows them to make informed decisions based on publicly available financial information.

In contrast, private companies do not offer their shares on public exchanges and typically have a more limited number of shareholders. This can restrict their access to capital markets, making them more reliant on private funding sources, including personal investments or private equity.

This fundamental difference highlights the varying levels of regulatory scrutiny, capital acquisition methods, and governance structures between public and private companies.