Publicly Traded Companies
One of the two main types of corporations is the publicly traded, or public, corporation – the other being the closely held corporation. Publicly traded corporations release stock to raise capital for their business. These shares are listed on a stock market, such as the New York Stock Exchange (NYSE) in the United States or the Tokyo Stock Exchange in Japan. Most of the world’s largest companies are publicly traded corporations, although the majority of smaller companies are closely held corporations.
In publicly traded companies, the corporation is owned collectively by the people who purchase its shares. These stockholders elect a board of directors to run the day-to-day workings of the company to best ensure the profitability of the company’s stock. Because of the inherent ability of corporations to raise large amounts of capital – thanks to the ability to issue stock – the largest companies in the world tend to operate under this structure.
But while publicly traded corporations are able to raise greater amounts of capital than closely held corporations, the latter are generally in a better position to make quick adjustments, due to the autonomy of the heads of the company. Additionally, the publicly traded corporation’s value fluctuates more with the market than does a closely held corporation.
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To learn more about publicly traded corporations and Texas LLC, contact Texas Legal Entities at 512-472-2431.
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