Public corporations

A public, publicly traded, publicly held company, or public corporation is a corporation whose ownership is dispersed among the general public in many shares of which are freely traded on a or in over the counter markets. In some jurisdictions, public companies over a certain size must be listed on an exchange.

In the early modern period, the Dutch developed several financial instruments and helped lay the foundations of modern financial system. The Dutch East India Company (VOC) became the first company in history to issue bonds and shares of to the general public. In other words, the VOC was officially the first publicly traded company, because it was the first company to be ever actually listed on an official . While the Italian city-states produced the first transferable government bonds, they did not develop the other ingredient necessary to produce a fully fledged capital market: corporate shareholders. As Edward Stringham (2015) notes, "companies with transferable shares date back to classical Rome, but these were usually not enduring endeavors and no considerable secondary market existed (Neal, 1997, p. 61)."

Usually, the securities of a publicly traded company are owned by many investors while the shares of a privately held company are owned by relatively few shareholders. A company with many shareholders is not necessarily a publicly traded company. In the United States, in some instances, companies with over 500 shareholders may be required to report under the Securities Exchange Act of 1934; companies that report under the 1934 Act are generally deemed public companies.

Publicly traded companies are able to raise funds and capital through the sale (in the primary or secondary market) of shares of . This is the reason publicly traded corporations are important; prior to their existence, it was very difficult to obtain large amounts of capital for private enterprises. The profit on stock is gained in form of dividend or capital gain to the holders.

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