Public Company

A public company is a company that has issued securities that are now traded on the open market. A common misperception is that an investor can become a shareholder by buying stock in any public company. In fact, a public company may be closely held, with only publicly traded debt. Nevertheless, the most common way to form a public company is for a successful private company to raise capital in an initial public offering. If a public company issues stock, the company may be listed on a stock exchange, such as the New York Stock Exchange, or the shares may be traded over the counter. In the US, every public company must file quarterly and annual reports with the SEC. The investor can also own a public company stock indirectly by investing in a mutual fund.