Why might a closely held corporation choose to remain private? Why might it choose to be publicly traded?

Answer 1

Private: Two main reasons. 1. The owners of the privately held corp maintain full control over all aspects over the corp. They run the show as they want, no questions asked. If they have shareholders they generally have to do what is best for short term profits. 2. The fact that a corp wouldn't have to deal with government regulations such as Sarbanes-Oxley and others.

Public. One answer: $$$$$$. By selling shares you reward the current owners of the company by giving them stock in the new company and secondly the company would get a bunch more capital in from the sale of stock to the general public.

Answer 2

Depends on what the owners want. If the owners want to be left alone by the SEC, they will stay private to avoid complying with Sarbaines-Oxley. If they want access to tons of cash, they will go public and suffer the hassles of SarbOx.

Answer 3

Close corps are usually financed internally and might never float on the stock exchanges, if they do, then they become public corps offering shares to the public.