Privately held company

A privately held company, or simply private company, is a business whose shares are not sold to the public. Unlike companies that are listed on stock markets, private companies keep their ownership private, often trading their company's stock through private deals, sometimes called "over-the-counter". These companies may also be called unlisted organizations, unquoted companies, or involved in private equity.

Even though private companies are often less famous than publicly traded businesses, they play a big role in the world's economy. For instance, in 2008, the 441 largest private companies in the United States brought in $1.8 trillion in sales and provided jobs for 6.2 million people, as reported by Forbes.

Generally, any company that is not owned by the government is considered a private business. This includes both companies that are publicly traded and those that are privately held, since their owners are private individuals.

State, private, and cooperative ownership

Private ownership of businesses is different from when the state ownership or collective ownership controls them. This idea is often used in places that used to be part of the Eastern Bloc to show the difference from older state-owned enterprises. But it can be used anywhere to compare with state-owned or collectively owned companies.

In the United States, a privately held company means a business owned by private people, investors, or the people who started the company. Its shares are not sold to the public on stock markets. This is different from public companies, whose shares anyone can buy.

Ownership of stock

In countries with public trading markets, a privately held business means that its ownership shares are not sold to the public. These companies are often owned by the people who started the business, their families, or a small group of investors. Sometimes, employees also own parts of these companies. Most small businesses are privately held.

Subsidiaries and joint ventures of publicly traded companies (for example, General Motors' Saturn Corporation) share traits of both privately held and publicly traded companies. These companies follow similar rules to privately held companies but their finances are also part of their parent companies reports.

Form of organization

See also: List of legal entity types by country

Private companies can be known as corporations, limited companies, limited liability companies, unlimited companies, or other similar names. These names depend on where the company is based and how it is set up. In the United States, some partnerships, sole proprietorships, or business trusts can also be private companies, but this is not common in the United Kingdom.

Many countries have special ways to organize private companies. For example, in the United Kingdom, there is the private company limited by shares, often called Ltd. In South Africa and Australia, private companies might be called Pty Ltd or Pty. In India, private companies must include the words "Private Limited" at the end of their name.

Reporting obligations and restrictions

Privately held companies usually have simpler rules about sharing information than companies that sell their shares to the public. For example, in the United States, these companies do not need to share their financial details with everyone. This helps protect their information from others who might use it against them.

Because they don’t have to share as much, private companies can make decisions more quickly without needing approval from everyone who owns a piece of the company. Different countries have different rules for these companies, but they often allow more flexibility and fewer reports than public companies.

Privately owned enterprise

A privately owned enterprise is a business owned by private people or groups, not by the government. These businesses are part of what we call the private sector of an economy. In a system called capitalism, private businesses are very important, and the owners control any extra money the business makes. This is different from socialism, where the state or everyone together owns the industry.

There are different types of privately owned businesses:

• Sole proprietorship: This is a business owned by one person, who might work alone or hire others. The owner is responsible for all the business debts.
• Partnership: This is when two or more people work together to make a profit. Each partner is responsible for the partnership's debts.
• Corporation: A corporation is a business owned by one or more shareholders and led by a board of directors. It can be privately held or available to the public.
• Hybrid Types: Some countries have special types of businesses that mix features of corporations and partnerships, like GmbH in Germany, LLC in the United States, and LLP in the United Kingdom.