Monthly Archives: April 2015

Why Companies Stay Private over real Financial position ?

 

The concept of business is implemented through a set up called companies and firms. There are companies that are private, public, limited and such. Most of the companies during their start up stage remain private. Some of these companies decide to open their shares to public in order to make more capital available for their investments and expansion needs, on the other hand.

In spite of several advantages of going public, here are the reasons why companies stay private,
– First and foremost reason is complete ownership, which lets the owners to take decisions without being answerable to non-owners or public on their decisions and actions
– Need not share profits and can retain the major part of revenue
– Not subjected to auditing and monitoring of many Associations and Organizations that monitor public companies and hence need not worry about adhering to stringent standards and that means flexibility on administration
– Lesser information available to public when remain private and closed and hence key strategies, decisions, business secrets won’t get leaked out which adds advantage in competitive business scenario
– Lesser dividends and interests when private companies go for venture capital sources for funds instead of public through share market.