What is the primary difference between the responsibility of a private corporation to its shareholders versus...

What is the primary difference between the responsibility of a private corporation to its shareholders versus a publicly traded corporation? Explain with examples.

Expert Solution

Share holders of Private Corp	Share holders of Public corp
The share holders willfully purchase the shares held privately. Those are willing investors.	The shares in public ltd are registered and the investors are general public.
There is no built place for the stocks to be traded on	The stocks held by publicly limited shareholders can trade their shares on Stock exchange
The shareholders doesn't have to follow any rules and regulations by SEC until the company reaches $10 million.	All the standards and regulations are set by SEC and the shareholders need to abide by it.
Most of the shareholders source the funds through venture capital.	Shareholders here source their funds by selling shares & bonds.

For example and comparison:

Public ltd has lot of legal restrictions for which the investors has to obey. Wherein, private ltd, the investors enjoy less legal restrictions.

When the shareholders wants to transfer their shares, they can freely transfer in Public ltd but it is completely restricted in Private ltd.

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jeff jeffy answered 1 month ago

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