TeachMeFinance.com - explain Private company
Private company -- English ; a term applied (in contradistinction
to a public company) to a company public subscription to
the stock of which is not invited. When a private business is continued as a corporation instead of a partnership and stock
is allotted to each partner for his interest or share in the business
the business is said to have been converted into a private
company. An entirely new business or enterprise, however,
may be and often is started as a private company instead of
a partnership. Usually there is an agreement among the
shareholders (stockholders) whereby each is prohibited from
disposing of or transferring his shares without the consent of
the others. What in Great Britain is termed a private company is in the
United States known as a close corporation.
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