A publicly held corporation is a form of corporation distinct from a closely held corporation.

Most of the well known large businesses in the United States are publicly held coporations

When a business sells its equity or debt more widely to the public the corporate form is usually required. This initial going public process for selling equity is called an "IPO," initial public offering, and is regulated by federal securities laws.

  • The money raised in going public cane be used to fund expansion of the business or to pay back the initial investors or venture capitalists. Once a corporation has a public offering, the shares are publicly traded in some stock market where investors can continually trade shares of the corporation.

Publicly held corporations have a large number of widely dispersed shareholders, this may increase the need for formalities and compliance with rules. The dispersion also makes it difficult for the shareholders to act together, making contractual arrangements sometimes inappropriate. In addition, certain markets mechanisms are available to protect invesotrs in publicly held ocropration which are not available in a closely held corporation. Shareholders of publicly held corporations have the opportunity to exit by selling their shares in the stock market.

ownership is widely dispersed.. the ownership (stock) is freely transferrable... There is an established market for stock; by market, many people who are interested in buying and selling it.. However, if talk about markets in more formal sense, talk about securities markets which are facilities that help facilitate these stock transactions..

The legal issues -

  • 1) How to provide the stock holders with some meaningful control over what their corporations do. If own Apple stock, do I have a say in what Apple does? Thus, because of wide ownership, who thus controls the corporation. Thus, the question becomes, how to make the managers accountable;
  • 2) This hits upon the second question, to whom must they be accountable? It could be also employees, public, environment
  • 3) Fraud -