2016-12-30 00:00:00 Finance and Accounting English Understand the difference between private shares and public shares, how to invest in private companies, and why a company may resist going... https://d1bkf7psx818ah.cloudfront.net/wp-content/uploads/2017/03/08214452/Male-and-female-discuss-private-shares-sitting-near-computer-monitor.jpg What are Private Shares?

What are Private Shares?

0 min read

Private shares of stock are issuances of equity in a company that is not publicly listed on a stock exchange. Anyone can own private shares, although the stock must be purchased directly from the issuing company. In addition, private shares are typically only bought during capital funding ventures and purchased in large quantities. Private stock can typically only be sold back to the issuing company.

A private company may perform a buyback of stock to consolidate who owns the company, reduce the cost of outstanding capital, or capitalize on the belief its stock is undervalued. A major difficulty of selling private stock is valuing the equity as there is no public market that establishes the price per share.

References & Resources

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

Related Articles

Dealing With Capital Gains Tax When Selling Your Business

If you sell your business, you may have capital gains, and by…

Read more

How Much Voting Rights Should You Give Investors?

As a small business owner, if you are offering shares of equity…

Read more

Three Things Accountants Need to Know About Blockchain

With the increasing use of Bitcoin and other cryptocurrencies, understanding blockchain technology…

Read more