Mika
VIP Contributor
A public company means a company whose shares are available for trading through the stock exchange. Investing in a public company is available for general people, anyone can buy and sell shares, whenever she or he wants. A private company means a company owned by a few people and buying and selling of shares is done privately. Only the people in the close circle, possibly friends and family, can invest in a private company.
Public companies have huge paid-up capital and working capital, whereas private companies have comparatively small capital. Interestingly, when private companies want to raise funds for business development, they go public and sell their shares to the general public. A lot of big companies that you see today were initially started as private companies, for example, Apple, Amazon, Microsoft, Facebook, Google, you name it. However, sometimes a public company can also be converted into a private company, Elon Musk offering to buy Twitter was one such example.
You can start investing in a public company with small funds, investing in a private company requires huge funds.
Public companies have huge paid-up capital and working capital, whereas private companies have comparatively small capital. Interestingly, when private companies want to raise funds for business development, they go public and sell their shares to the general public. A lot of big companies that you see today were initially started as private companies, for example, Apple, Amazon, Microsoft, Facebook, Google, you name it. However, sometimes a public company can also be converted into a private company, Elon Musk offering to buy Twitter was one such example.
You can start investing in a public company with small funds, investing in a private company requires huge funds.
