A public corporation is a legal entity publicly traded on a stock exchange. Public corporations are owned by the shareholders who have purchased its shares. By owning shares, these shareholders can have a say in the day-to-day running of the corporation. This means that the board of directors and management directly answer to shareholders.
Public corporations are regulated under the laws of the state in which they are incorporated, and the rules and regulations of the securities exchange where they are traded. As a part of that, public corporations must abide by certain financial reporting requirements, including releasing audited financial statements each fiscal year.
Benefits of a Public Corporation
The primary goal of a public corporation is to make its investors money. Companies that enter the public markets are typically in a more advantageous position to raise the capital they need to scale and grow. This is because anyone can invest in a public corporation by purchasing shares.
When a company goes public, it also has more visibility. The company is more likely to be recognized as a recognized brand in the marketplace, which is useful for creating business opportunities.
Examples of Public Corporation
Many of the more well-known publicly-traded companies in the world are public corporations. Examples of public corporations include Apple, Amazon, Alphabet (Google), and Microsoft.