What exactly is the differance between a public company and a private one?
What can I do to make sure nobody controls my company by bing some of it?
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A public company offers partial ownership stocks to anyone who wants to buy them. A private company is owned by only a single person or a small number of people, and strangers do not have the opportunity to purchase shares in the company. Because public companies allow strangers to buy shares, there are laws governing what sort of information those companies have to make public, so that investors can make informed decisions. Private companies don’t have to provide much public information about how they are run.
When you make your company public, you offer a certain percentage of ownership of the company to the public, in the form of shares of stock. In order to make sure you continue to control the company, you have to make sure that you control a large enough chunk of the stock so that no one else can get a large chunk and take over. The easiest way to do that is to keep 50.1% of the stock for yourself, and sell the other 49.9%. That way, even if one person buys all the public stock, you still have more than them. However, by keeping 50.1% of your stock, you are missing out on money you could make from selling all those shares. If you are willing to take a risk, you could keep only 20% of the stock for yourself, and hope that no one else has the ability to purchase a chunk that large.
Companies also have other options like creating different types of stock, one kind with voting power, and another kind with less or no voting power. That way, even if someone manages to buy up a huge chunk of your stock, they still wouldn’t have any voting power.
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