Privately Held

Fog, Paris, France
Fog, Paris, France

A company is privately held if its shares are not traded on the open market, the opposite of a public company. In most cases the company’s founders and/or their heirs, management or a group of private investors, own the company.

Apart from the owner structure, one of the biggest differences between a private and a public company is the obligations for public disclosure. Public companies are required to release reports on a regular basis, for example, to file quarterly earnings reports to the shareholders and the public.

Private companies, however, do not have similar disclosure obligations to the public. Privately held companies have usually no access to the financial markets via selling stock or bonds but have to finance internally or by private funding.

In contrast to common belief, privately held companies can reach an enormous size and turnover, for example, Koch Industries, Cargill, Mars, Bechtel, or large law firms. The notion privately held company is sometimes also used as opposite to state-owned companies.