What's the difference between Public Company and Private Company?

[The Joker]

for example FACEBOOK IS PRIVATE?

AND the public can't INVEST IN IT?

only a select few or chosen can invest?

why is that?

[champ_85]

Companies are started investments by individuals and/or other companies. Those investors are the original shareholders. Over time, as the company grows, it usually needs more capital to finance its growth. If the original investors do not continue to use their own money, they look to outsiders (such as other individuals and investment bankers). As long as the investors want to keep total control of that company, they have that choice, but also keep the responsibility to finance that company, so the owners still control who they want to be shareholders of that privately owned company. Most companies in the world are privately owned, and have no obligation to offer part ownership in their company. However, once a company gets too large for internal funding, they can go to a brokerage house (eg. Schwab, Merrill Lynch, Morgan Stanley etc.) and determine if their company qualifies to go public. If it qualifies, it then significantly increases its outstanding shares and sells them to the public as an IPO. After that, anybody can become a shareholder of that newly PUBLIC company. Remember, no person must sell part of their company if they don't want to or don't need to, no matter how small or large they have made that company. Hope this helps!