Public Company

A public company is a business entity whose shares are offered for sale to the general public on a stock exchange. Individuals who purchase these shares become shareholders, acquiring ownership rights and a stake in the company’s profits.

Key Features of a Public Company:

Publicly Traded Shares Shares are listed on stock exchanges and can be freely bought and sold by the public. Enables the company to access a large pool of investors. Ownership and Equity Shareholders are partial owners of the company. They may receive dividends and have voting rights on key corporate decisions. Raising Capital through IPO If a private company needs additional funds, it can transition to a public company through an Initial Public Offering (IPO). An IPO allows the company to sell shares to the public, generating capital for expansion, debt repayment, or other business objectives. Regulatory Compliance Public companies are subject to strict regulatory requirements and disclosure norms set by securities regulators. Regular reporting ensures transparency for investors. Importance of Public Companies Provides access to large-scale capital for growth and expansion. Enhances credibility and visibility in the market. Allows investors to participate in the company’s success. Facilitates liquidity for shareholders through stock exchanges.

Example: Companies like Tata Consultancy Services (TCS) and Infosys are public companies listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) in India