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Public company
a. Definition:
A company that has issued securities through an initial public offering (IPO)
and is traded on at least one stock exchange or in the over the counter
market. Although a small percentage of shares may be initially "floated" to the
public, the act of becoming a public company allows the market to determine
the value of the entire company through daily trading.
A public company is a company that is permitted to sell its registered
securities to the general public also referred to as a publicly-traded company
They are owned by large groups of people, each of whom own
anywhere from one share to thousands of shares in the company
Shares of a public company are openly traded and widely distributed
In a public company, the ownership is shared between the shareholders,
including the board of management and public shareholders
The profits of the company are divided among the shareholders and
paid to them as dividends
These dividends are the primary motivation for most shareholders in
investing their money in publicly traded corporations
b. Obligations: Once a company goes public, it has to answer to its shareholders.
For example, certain corporate structure changes and amendments must be
brought up for shareholder vote. Shareholders can also vote with their dollars by
bidding up the company to a premium valuation or selling it to a level below its
intrinsic value.
Able to raise substantial amounts of capital in the public capital markets,
trading ownership shares as well as control of the company;
Are subject to higher levels of costly reporting, regulations, and public
scrutiny (kim li phiu bu);
Are wholly-owned entities and undertook deeds (hnh vi) of cross guarantee
with every other company in the closed group;
Disclosing entities, borrowing corporations and licensed securities dealers or
futures brokers;
Changes within the company (such as the capital structure of the company)
need to be approved by the shareholders
2. Stakeholders:
A person, group or organization that has interest or concern in an organization
Stakeholders can affect or be affected by
the organization's actions, objectives and policies
Key stakeholders are creditors, directors, employees, government (and
its agencies), owners (shareholders), suppliers, unions, and the community from
which the business draws its resources
Not all stakeholders are equal.
A company's customers are entitled to fair trading practices but they are not
entitled to the same consideration as the company's employees
There are two types of stakeholders:
Primary stakeholders
Those whose continued association is absolutely necessary for a firms survival
Include employees, customers, investors, and shareholders, as well as the
governments and communities that provide necessary infrastructure
Secondary stakeholders
Do not typically engage in transactions with a company and thus are not
essential for its survival
Companies must be sure to seek partners who share their commitments for
reducing their environmental footprint, preserving and protecting human
rights and a host of other issues
e. Competitors:
An often overlooked stakeholder for any company is its competitor,
because often the actions of one player can influence the image of an entire
industry (or business in general)
Company should create competitive advantage for their own in case of
customers switching their consuming habit into other competitors such as
higher quality, unique characteristics, well-known reputation with luxury
products, built or create their own brand name, etc.
f.
Communities:
Anyone who has tried and failed to get a business permit knows the power of
local communities. They need to buy products before the company get a
chance to sell them anything, and it is another way help the company to retest their products
Managing your relationship with the community can result with some issues
such as company can indirectly or directly take public hearings where people
speak on their own voices about the product quality and what they expect
from products or services the company can bring to them