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Public company

Public company

A public company is a company permitted to sell its shares to the general public. Its shares may be listed on the stock exchange through an initial public offering (IPO).

A public company has the following advantages:

  • Unlimited number of shareholders means unlimited growth potential.

  • Shares are freely transferable.

The disadvantages of public companies are that:

  • Filing and disclosure filings are onerous.

  • Costs associated with meeting regulatory requirements are higher.

  • Liability risks are higher for the company and management.