PRWR 207: Writing for the Workplace - Dr. O'Brien: Publics, Privates, and Subsidiaries

Publicly Traded Companies

Publicly traded companies sell stock to the general public through a stock exchange. In the U.S., the SEC (Securities and Exchange Commission) is the legal entity that requires public companies to report financial and other information, so that investors can determine for themselves if that company's stocks are a good investment. SEC reports are very detailed and this is where most business services start when compiling information and statistics about companies.

Private/Closely Held Companies          

Privately or closely held businesses, are those for which there is no public ownership of its  or stocks or assets. They do not sell stocks through an exchange so they are NOT required to file reports with the SEC or any other entity. Although closely held businesses tend to be small, family owned or partnerships of a small group of people, they can also be large or wholly owned subsidiaries of major publicly traded companies. It should be kept in mind that the majority of businesses in the United States are private.As a result, it can be very difficult to locate detailed information about a private company.

Subsidiaries

A subsidiary is a distinctly separate firm controlled by a parent company. A subsidiary is referred to as "wholly owned" when 100% of its stock is owned by its parent company. Large publicly held multi-national companies often own dozens of smaller privately owned subsidiaries for which financial information is filed under the name of the parent company. As a result, having knowledge of whether a private firm is a subsidiary of a public corporation is extremely important when looking for company information.