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{{redirect|Independent company|the type of military unit|Independent company (military)}}
{{Short description|Business with a small number of owners}}
{{Multiple issues|
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{{Companies law}}
A '''privately held company''' (or simply a '''private company''') is a company law whose shares and related rights or obligations are not offered for public subscription or publicly negotiated in the respective listed markets but rather the company's stock is offered, owned, traded, exchanged privately, or [[over-the-counter (finance)|over-the-counter]]. In the case of a '''closed corporation''' (or '''closely held corporation'''), there are relatively few [[shareholder]]s or company members. Related terms are '''unquoted company''' and '''unlisted company'''.

They are less visible and may be less popular than their [[public company|publicly traded]] counterparts, but private companies have major importance in the world's [[economy]]. In 2008, the 441 [[list of largest private non-governmental companies by revenue|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 four million people. In 2004, the ''Forbes'' count of privately held U.S. businesses with at least $1 billion in revenue was 305.<ref name=":0">{{cite news | editor=Reifman, Shlomo | editor2=Murphy, Andrea D. | url=https://www.forbes.com/2008/11/03/largest-private-companies-biz-privates08-cx_sr_1103private_land.html | title=America's Largest Private Companies | work=[[Forbes (magazine)|Forbes]] | date=6 November 2008 | access-date=30 January 2018 | archive-date=20 March 2019 | archive-url=https://web.archive.org/web/20190320062353/https://www.forbes.com/2008/11/03/largest-private-companies-biz-privates08-cx_sr_1103private_land.html | url-status=live }}</ref>

Separately, all non-government-owned companies are considered '''private enterprises'''.{{cn|date=June 2023}} That meaning includes both publicly traded and privately held companies since their investors are individuals in the [[private sector]].

==State ownership vs. private ownership vs. cooperative ownership==
Private ownership of productive assets differs from [[state ownership]] or [[collective ownership]] (as in worker-owned companies). This usage is often found in former [[Eastern Bloc|Eastern Bloc countries]] to differentiate from former [[state-owned enterprise]]s,{{Citation needed|date=September 2007}} but it may be used anywhere when contrasting to a state-owned or a collectively 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 ==
{{Unreferenced section|date=August 2016}}

In countries with public trading markets, a privately held business is generally taken to mean one whose ownership [[share (finance)|shares]] or interests are not publicly traded. Often, privately held companies are owned by the company founders or their families and heirs or by a small group of investors. Sometimes employees also hold shares in private companies.<ref>{{cite book | author=Loewen, Jacoline | year=2008 | title=Money Magnet: Attract Investors to Your Business | publisher=[[John Wiley & Sons]] | location=Canada | isbn=9780470155752 }}</ref>{{Page needed|date=December 2014}} Most [[small business]]es are privately held.

[[Subsidiary|Subsidiaries]] and [[joint venture]]s of [[Public company|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 [[Holding company|parent companies]], as required by the accountancy and securities industry rules relating to groups of companies.

== Form of organization ==
{{See also|List of legal entity types by country}}

Private companies may be called [[corporation]]s, [[limited company|limited companies]], [[Limited liability company|limited liability companies]], [[unlimited company|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 [[partnership]]s, [[sole proprietorship]]s or [[Trust (business)|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.{{Unsourced section|date=April 2023}}

In many countries, there are forms of organization that 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 [[unlimited company]] and the [[proprietary limited company]] (abbreviated ''Pty Ltd'') or [[unlimited company|unlimited proprietary company]] (abbreviated ''Pty'') in South Africa and Australia.{{Unsourced section|date=April 2023}}

In India, private companies are registered by the [[Registrar of Companies (India)|Registrar of Companies]], under the [[Ministry of Corporate Affairs]]. Indian private companies must contain the word Private Limited at the end of their names.<ref>{{Cite web|url=https://www.mca.gov.in/mcafoportal/showCheckCompanyName.do|title=Ministry of Corporate Affairs - MCA Services|access-date=2021-09-03|archive-date=2021-09-01|archive-url=https://web.archive.org/web/20210901071619/https://mca.gov.in/mcafoportal/showCheckCompanyName.do|url-status=live}}</ref>

== Reporting obligations and restrictions ==
Privately held companies generally have fewer or less comprehensive reporting requirements and obligations for [[transparency (humanities)|transparency]], via annual reports, etc. than publicly traded companies do. For example, in the United States, unlike in Europe{{where|date=May 2012}}, 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.<ref name="PrivCo">{{cite web | url=http://www.privco.com/knowledge-bank/intro-to-private-companies | title=Introduction to Private Companies | website=Private Company Knowledge Bank | publisher=PrivCo | access-date=2011-03-11 | archive-date=2019-03-20 | archive-url=https://web.archive.org/web/20190320062355/http://www.privco.com/knowledge-bank/intro-to-private-companies/ | url-status=live }}</ref><ref name="Library">{{cite web | url=https://www.loc.gov/rr/business/company/private.html | title=Private Company Research | website=Business Reference Services | publisher=[[Library of Congress]] | date=10 Jan 2013 | access-date=30 December 2017 | archive-date=21 February 2019 | archive-url=https://web.archive.org/web/20190221203601/http://www.loc.gov/rr/business/company/private.html | url-status=live }}</ref> 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]] (ASIC). 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 United States, private companies are held to different accounting auditing standards than public companies, overseen by the Private Company Counsel division of the [[FASB|Financial Accounting Standards Board]].<sup>(see [[#External links|external links]])</sup>

Researching private companies and private companies' financials in the United States can involve contacting the [[Secretary of state (U.S. state government)|secretary of state]] for the [[United States state|state]] of incorporation (or for LLC or partnership, state of formation), or using specialized private company databases such as [[Dun & Bradstreet]]. Other companies, like [[Sageworks]], provide aggregated data on privately held companies, segmented by industry code.<ref>{{cite web|url=http://www.foxbusiness.com/economy/2012/02/01/sageworks-private-company-data/|title=Sageworks Private Company Data|date=1 Feb 2012|publisher=[[Fox Business Network]]|archive-url=https://web.archive.org/web/20151029235820/http://www.foxbusiness.com/economy/2012/02/01/sageworks-private-company-data/|archive-date=2015-10-29}}</ref>

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 ==
{{Unreferenced section|date=January 2021}}
A '''privately owned enterprise''' is a commercial enterprise owned by private investors, shareholders or owners (usually [[corporation|collectively]], but they can be owned by a [[sole proprietorship|single individual]]), and is in contrast to state institutions, such as [[state-owned enterprise|publicly owned enterprises]] and [[government agency|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) a business surplus is controlled by the owners, is referred to as [[capitalism]]. This contrasts with [[socialism]], where the industry is owned by the [[public sector|state]] or by all of the community in common. The act of taking assets into the private sector is referred to as [[privatization]].

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

===Types of privately owned businesses===
{{Unreferenced section|date=August 2016}}
* '''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 [[Legal liability|liability]] for 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 a profit. Each partner has total and unlimited personal liability for the debts incurred by the partnership. There are three typical different types of classifications for partnerships: [[general partnership]]s, [[limited partnership]]s, and [[limited liability partnership]]s.
* '''Corporation:''' A business [[corporation]] is a for-profit, [[limited liability]] or [[unlimited company|unlimited liability]] entity that has a separate [[legal personality]] from its members. A corporation is owned by one or more [[shareholder]]s 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 [[State Enterprise|government-owned corporations]]. A corporation may be privately held ("close", or closely held—that is, held by a few people) or publicly traded.
* '''Hybrid Types:''' Some countries, like Germany, the United States, and the United Kingdom have created a hybrid type of entity that has characteristics of both a corporation and a partnership. In Germany, it is called a Gesellschaft mit beschränkter Haftung (Gmbh), in the United States it is called a Limited Liability Company (LLC), and in the United Kingdom it is called a Limited Liability Partnership (LLP). It is considered a corporate body similar to a corporation but is typically taxed like a partnership.

==See also==
* [[Limited company]]
* [[Private company limited by shares]]
* [[Private equity]]
* [[Public company]]
* [[Unlisted public company]]

== References ==
{{reflist}}

== External links ==
* [http://www.fasb.org/pcc Private Company Council] {{Webarchive|url=https://web.archive.org/web/20160107205311/http://www.fasb.org/pcc |date=2016-01-07 }}, a part of the [[Financial Accounting Standards Board]]

{{DEFAULTSORT:Privately Held Company}}
[[Category:Privately held companies| ]]
[[Category:Types of business entity]]
[[Category:Private sector]]

Privately held company - Revision history

Ajay Kumar: Created a new article