Public Corporation: Stock Market & Ownership

A public corporation is fundamentally distinct from terms such as private companies, government entities, and state-owned enterprises because its shares are available for trade on the stock market. The defining attribute of the stock market involves accessibility because it enables various investors to acquire ownership stakes. Government entities represent organizations operating under governmental control, which is in contrast to public corporations. Private companies do not offer their ownership stakes to the general public. State-owned enterprises are owned and operated by the government on behalf of the state, unlike public corporations.

Contents

Decoding the World of Public Corporations: What’s the Big Deal?

Ever wonder who’s really behind that morning coffee, the phone in your pocket, or the car you drive? Chances are, a public corporation plays a significant role. These giants of the business world are everywhere, shaping our daily lives and driving the global economy. But what exactly are they, and why should you care?

Public Corporations: Unveiling the Mystery

Think of a public corporation as a business that’s decided to share the wealth, in a way. Unlike a private company, a public corporation offers shares of its ownership to the general public, meaning anyone can buy a piece of the pie (if they’ve got the dough, of course!). Key traits? They’ve got publicly traded shares, meaning you can buy and sell them on the stock market. There’s a clear separation of ownership (the shareholders) and management (the executives running the show). And finally, they operate under the watchful eye of regulatory bodies, like the SEC.

What’s on the Menu? A Sneak Peek

In this blog post, we’re going to dive deep into the fascinating world of public corporations, covering everything from the role of the SEC as the corporate watchdog to the exciting (and sometimes nerve-wracking) journey of a company going public through an IPO. We’ll explore how stock exchanges function as the marketplace for shares, what rights you have as a shareholder, and the crucial role of the Board of Directors in keeping things in check. We’ll even demystify corporate governance, shed light on financial reporting, and discuss the impact of landmark regulations like SOX and Dodd-Frank. Finally, we’ll examine the immense influence of institutional investors.

A Word of Caution (and a Bit of Humor)

Investing in or dealing with public corporations can be a bit like navigating a maze – exciting, but also potentially confusing. There are complexities and pitfalls aplenty. So, while we’re here to arm you with knowledge, remember that this isn’t a substitute for professional advice. Think of us as your friendly guide, pointing out the landmarks, but always remember to consult with a qualified financial advisor before making any big decisions. After all, we want you to enjoy the journey (and hopefully make some money along the way!), not end up lost in the corporate wilderness!

The Watchdog: The SEC and Its Role

Ever wondered who’s keeping an eye on those massive public corporations, making sure they play fair? Enter the Securities and Exchange Commission, or SEC, the U.S. government’s top cop for the financial world. Think of them as the guardians of Wall Street, ensuring that everyone, from big-time investors to your grandma buying a few shares, gets a fair shake.

SEC: Protector of Investors and Markets

The SEC has a three-part mission:

Protecting investors: This is priority number one. The SEC works to prevent fraud, manipulation, and other shenanigans that could hurt investors. They want to ensure you’re not getting swindled.
Maintaining fair, orderly, and efficient markets: Imagine a chaotic marketplace where no one follows the rules. That’s what the SEC is preventing. They ensure markets function smoothly and transparently.
Facilitating capital formation: Companies need capital to grow and create jobs. The SEC wants to make it easier for them to raise money while still protecting investors.

Enforcing the Rules: The SEC’s Powers

So, how does the SEC do all this? Well, they’ve got some serious teeth. They’re the ones who enforce securities laws, investigate potential violations like insider trading (when someone uses confidential information for personal gain), and outright fraud. If a company is caught doing something shady, the SEC can take action.

Recent Enforcement Actions: Examples in Action

The SEC doesn’t just talk the talk; they walk the walk. Here are a couple of examples of how the SEC has flexed its regulatory muscle recently:

Cracking down on misleading claims: Several companies have recently had to pay huge fines for making misleading claims about their business or products to attract investors.

These cases show that the SEC is serious about holding companies accountable and protecting investors from deceptive practices.

The SEC’s actions have a real impact. Companies that get caught violating securities laws often see their stock prices plummet, face hefty fines, and even have their executives face criminal charges. It’s a tough lesson, but it sends a clear message: play by the rules or face the consequences.

From Private to Public: Taking the Plunge into the IPO Pool

Ever wondered how a company goes from being a small, privately-held operation to a name you see plastered across the stock ticker? That, my friends, is the magic of an Initial Public Offering, or IPO. Think of it as a company’s coming-out party, where it offers shares to the public for the very first time. It’s a huge step, kind of like going from playing in your garage band to headlining a stadium tour. But how does a company actually do it? Let’s break it down.

The IPO Steps: A Journey to the Stock Market

The road to becoming a publicly traded company is paved with paperwork, presentations, and plenty of nail-biting moments. Here’s a roadmap of the key steps:

Selecting an Investment Bank: First, the company needs a Sherpa, a guide to lead them through the treacherous IPO terrain. That’s where investment banks come in. They act as underwriters, meaning they help the company prepare for and execute the IPO.
Conducting Due Diligence: This is where the investment bank puts on its detective hat and digs deep into the company’s financials, operations, and legal compliance. They want to make sure everything is on the up-and-up before they put their reputation on the line.
Preparing a Registration Statement (S-1 Filing): The S-1 is a comprehensive document that provides potential investors with all the juicy details about the company. Think of it as a dating profile for the stock market – it needs to be honest, transparent, and enticing (without being misleading, of course).
Roadshow and Marketing: Time to hit the road! Company executives and investment bankers embark on a whirlwind tour, pitching the company to institutional investors. It’s like Shark Tank, but with more PowerPoint slides and fewer celebrity investors (usually).
Pricing and Allocation of Shares: Based on investor demand and market conditions, the company and investment bank determine the IPO price. Then, they allocate shares to investors, often prioritizing institutional investors and those with long-term investment horizons.
Listing on a Stock Exchange: The big day! The company’s shares are officially listed on a stock exchange like the NYSE or NASDAQ, and trading begins. Cue the champagne (responsibly, of course).

Investment Banks: The Underwriters of Wall Street

Investment banks play a vital role in the IPO process. They’re not just number crunchers; they’re strategic advisors, marketing gurus, and risk managers all rolled into one. Their responsibilities include:

Underwriting IPOs: Taking on the risk of buying the shares from the company and then selling them to the public.
Providing Valuation Advice: Helping the company determine a fair price for its shares.
Marketing the Offering: Generating buzz and excitement among potential investors.

IPOs: Not All Sunshine and Rainbows

While IPOs can be a lucrative opportunity for both companies and investors, they also come with their fair share of risks and challenges:

Market Volatility: IPOs are particularly vulnerable to market swings, and a sudden downturn can derail even the most promising offering.
Valuation Uncertainty: Determining the “right” price for a newly public company is an art, not a science, and there’s always the risk of over or undervaluing the shares.
Lock-Up Periods: Insiders (employees, executives, and early investors) are typically subject to lock-up periods, preventing them from selling their shares for a certain period of time after the IPO. This can create pent-up selling pressure when the lock-up expires.
Limited Historical Data: Unlike established companies, IPOs lack a track record of financial performance, making it difficult for investors to assess their long-term potential.

So, there you have it – a peek behind the curtain of the IPO process. It’s a complex and often nerve-wracking journey, but for companies with the right stuff, it can be a transformative step towards long-term success. And for investors, it’s a chance to get in on the ground floor of the next big thing.

The Marketplace: Where Stocks Find Their Soulmates (and Sometimes a Divorce Lawyer)

Ever wonder where all those shares of Apple, Tesla, or even that quirky biotech company you heard about actually *live?* Well, they hang out at stock exchanges! Think of the New York Stock Exchange (NYSE), or the NASDAQ as bustling marketplaces, kind of like the world’s fanciest, most high-stakes flea markets, but instead of vintage teacups, we’re dealing with ownership in actual companies. These exchanges are the epicenters where buyers and sellers (that’s you and me, potentially!) come together to trade shares of publicly traded companies. It’s where fortunes are made, lost, and occasionally, quietly misplaced under a pile of quarterly reports.

Decoding the Order Types: From “Gimme Now!” to “I’ll Wait for a Good Deal”

So, you want to buy some stock? Excellent! But before you dive in headfirst, you need to understand the lingo. There are different ways to tell the exchange what you want to do, the most common being market orders and limit orders. A market order is like shouting, “I want it now, at whatever the best available price is!” It’s quick and dirty. On the other hand, a limit order is more refined. You’re essentially saying, “I’m only willing to pay this much (or less) for the stock, and I’ll wait until the price drops to my level.” Think of it as haggling at that flea market, but with algorithms. Exchanges use complex systems to match these orders, prioritizing price and time to ensure fair and efficient trading.

The Velvet Rope: Listing Requirements

Not just any company can waltz into the NYSE or NASDAQ and start selling shares. Oh no, honey. There are listing requirements to meet. Think of it as a club with very specific rules about revenue, market capitalization (how much the company is worth), and corporate governance (how well it’s run). These requirements ensure that listed companies meet a certain standard of quality and transparency, protecting investors from, shall we say, less reputable ventures.

Exit Stage Left: Delisting and When a Company Gets the Boot

Sometimes, even companies that make it into the club lose their privileges. Delisting happens when a company no longer meets the exchange’s requirements. Maybe their stock price has plummeted, their financial performance has tanked, or they’ve run afoul of the rules. Getting delisted can be a major blow, making it harder for the company to raise capital and often leading to a further decline in its stock price.

Market Makers: The Unsung Heroes of Liquidity

Finally, let’s talk about market makers. These are the folks who stand ready to buy or sell shares at any given time, providing liquidity to the market. They’re like the designated drivers of the stock exchange, making sure there’s always someone willing to take the other side of a trade. By quoting bid and ask prices (the price they’re willing to buy at and the price they’re willing to sell at), they help to maintain orderly markets and prevent wild price swings. Without them, it would be much harder to buy or sell stocks quickly and efficiently.

The Owners: Understanding Shareholders’ Rights

So, you’ve bought some shares – congrats, you’re officially part of the club! But what does that actually mean? Let’s break down the perks (and a few responsibilities) that come with being a shareholder in a public company. In short, a shareholder is simply an individual or an entity that owns stock (shares) in a public corporation. When you buy shares, you become a part-owner, albeit sometimes a tiny part-owner, of that company. Think of it like owning a tiny sliver of a massive pizza – you might not get to choose the toppings, but you still get a slice!

What Rights Do Shareholders Have?

Being a shareholder isn’t just about bragging rights at cocktail parties; it comes with some real, tangible rights.

Voting Rights: This is where you get to flex your owner muscles! You get to vote on important stuff, like electing the Board of Directors (the folks who oversee the company’s management) and approving major corporate actions (think mergers, acquisitions, etc.). Each share typically equals one vote, so the more shares you have, the louder your voice.
Right to Receive Dividends: Ah, the sweet sound of dividends! If the company decides to share its profits with shareholders (not all companies do, especially those focused on growth), you’re entitled to a piece of the pie. It’s like getting a little thank-you note (in the form of cash!) for believing in the company.
Right to Inspect Corporate Books and Records: This isn’t a free pass to snoop through every email and document the company has ever created. There are limitations, of course, but as a shareholder, you generally have the right to access certain corporate books and records, helping you ensure things are on the level.
Right to Sue for Breach of Fiduciary Duty: Okay, this one’s a bit more serious. If the company’s directors or officers screw up and violate their fiduciary duty (their responsibility to act in the best interests of the shareholders), you have the right to take legal action. Think of it as your safeguard against corporate shenanigans.

The Importance of Proxy Statements

Ever get a pile of paperwork in the mail before a shareholder meeting? That’s your proxy statement! This document is your cheat sheet, filled with info about the matters you’ll be voting on. Read it! It’s your chance to understand what’s at stake and make informed decisions. It includes information like:

A breakdown of each proposed resolution.
Biographies of the director candidates.
Executive compensation details.

Shareholder Activism: Making Your Voice Heard

Don’t like the way things are going? That is where shareholder activism comes in! It is when shareholders can actually influence corporate decisions. It is when shareholders use their rights to try and influence a corporation’s behavior. This can range from writing letters to management to launching a full-blown proxy battle. Think of it as using your voice to steer the ship. It might include:

Submitting proposals for consideration at shareholder meetings.
Publicly campaigning for changes in corporate policy or leadership.
Engaging in direct dialogue with the company’s management team.

So, there you have it! Being a shareholder is more than just owning stock. It’s about having rights, staying informed, and having the potential to influence the companies you invest in. Pretty cool, right?

The Overseers: The Board of Directors’ Crucial Role

Ever wonder who’s really in charge at those big public companies? Sure, you see the CEO making headlines, but behind the scenes, there’s a group of individuals working as the company’s guardians: the Board of Directors. They’re like the adult supervision, ensuring everything runs smoothly, ethically, and (most importantly) in the best interest of the company’s true bosses – the shareholders! They are in charge of corporate governance as representatives of the shareholders.

Think of the Board as the shareholders’ representatives – they’re there to keep management in check and make sure the company is heading in the right direction. But what exactly do they do?

Responsibilities and Duties of Board Members

These folks wear many hats and have lots to juggle. Their key tasks include:

Overseeing Management: Basically, keeping an eye on the CEO and other top executives to ensure they’re doing their jobs effectively. They hire, fire, and, yep, even set that CEO pay package.
Setting Strategic Direction: Where is the company headed? What are the long-term goals? The Board helps chart that course, making sure the company doesn’t sail off a cliff.
Monitoring Financial Performance: Are we making money? Are we spending it wisely? The Board reviews financial statements and budgets, making sure the company is on solid financial ground.
Ensuring Compliance with Laws and Regulations: No one wants a run-in with the law! The Board ensures the company follows all the rules and regulations, keeping it out of trouble. This is why regulatory compliance is important.
Approving Major Corporate Transactions: Big merger? Acquisition? Major investment? The Board has to give its thumbs-up (or thumbs-down).

Board Committees: Specialized Squads

To handle these responsibilities effectively, boards often create specialized committees. Think of these committees like specialized units. A few common one are:

Audit Committee: This crew makes sure that a company’s financial reporting and internal controls are up to snuff. They are the financial watchdogs, overseeing the audit process and making sure that the numbers reported reflect the business reality.
Compensation Committee: Let’s be real: executive pay is always a hot topic. The Compensation Committee tackles this thorny issue, setting pay packages for the top brass. It seeks to align pay to company performance and make sure that executives are properly incentivized.
Nominating Committee: Who gets to be on the Board? That’s where the Nominating Committee comes in. They identify and recruit qualified candidates to serve as directors, ensuring a diverse and competent Board.

Holding Directors Accountable: The Shareholder’s Voice

So, how can shareholders make sure the Board is doing its job? The board is also responsible for corporate governance and ensuring fair financial practices. Shareholders have some powers:

Voting Rights: Shareholders get to vote on important matters, including electing directors.
Engagement: Shareholders can engage with the Board, expressing their concerns and offering suggestions.
Lawsuits: In extreme cases, shareholders can sue directors for breach of fiduciary duty.

The Board of Directors plays a vital role in the success and ethical conduct of public corporations. They’re the guardians of shareholder value and ensure that the company is run responsibly and sustainably. So, next time you see a company making headlines, remember there’s a Board behind the scenes, guiding the ship and ensuring the company stays on course.

The Guiding Principles: Corporate Governance Explained

Okay, so you’ve probably heard the term “corporate governance” thrown around, maybe in a movie about Wall Street or during a dry business lecture. But what is it, really? Think of it as the rulebook and the referee all rolled into one for how a company is run. It’s basically the system of rules, practices, and processes a company uses to direct and control itself. It’s how the big decisions get made and how everyone stays (relatively) honest.

Core Principles: The Pillars of Good Governance

Now, this “rulebook” isn’t just a bunch of random pages stapled together. It’s built on some key principles, the kind that make you nod and say, “Yeah, that makes sense.” Here are a few:

Accountability: Everyone answers to someone. Management answers to the board, the board answers to shareholders, the shareholders answer to the market(that one answer to shareholders is actually more of a request but there are mechanisms in place). It’s a chain of responsibility!
Transparency: Shine a light! No hiding in the shadows. Openness and honesty about the company’s activities and performance are key. What a company does is public.
Fairness: Treat everyone like you would want to be treated. All shareholders, big or small, should be treated equitably.
Responsibility: Be a good corporate citizen. Consider the impact of your actions on all stakeholders, including employees, customers, and the community.
Independence: The board needs to be able to think for itself. A board free from undue influence is a good board.

The Perks: Why Strong Governance Matters

So, why bother with all this “good governance” stuff? Because it pays off! Here’s how:

Improved financial performance: Well-governed companies tend to be more profitable. It might not be instant but it builds up overtime.
Enhanced reputation: A company that’s known for being ethical and well-run is going to attract investors and customers. People want to do business with good people, or entities in this case.
Increased investor confidence: Investors are more likely to put their money into a company they trust.
Reduced risk of fraud and misconduct: Strong governance acts as a deterrent to wrongdoing. Less problems in the future if a company is properly governed.

Transparency is Key: Financial Reporting and Compliance

Ever wonder how you can tell if a public company is doing swimmingly or sinking faster than a stone? Well, buckle up, buttercup, because it all boils down to financial reporting! Think of it as the company’s way of showing you its homework—warts and all. It’s super important because it gives investors and stakeholders like you a peek behind the curtain, offering accurate and reliable info about how the company is performing and where it stands financially. Without it, we’d be flying blind!

Decoding the Financial Statements: Your Rosetta Stone

Okay, so where do you find this magical information? Through financial statements, of course! These aren’t just numbers thrown together randomly; they’re carefully crafted documents with specific purposes. Here’s a quick rundown:

10-K (Annual Report): This is the company’s year-end report card—the comprehensive overview of its performance, strategies, and risks. If a company could write a book about its last year, this is it!
10-Q (Quarterly Report): A snapshot of the company’s performance every three months. Think of it as a mini 10-K, giving you updates between the big annual reports.
Balance Sheet: This shows what a company owns (assets) and what it owes (liabilities) at a specific point in time, plus the owner’s equity. It’s like a financial photo on a particular day.
Income Statement: Also known as the Profit and Loss (P&L) statement, this shows a company’s revenues, expenses, and profits over a period of time. Did they make bank, or did they break the bank?
Statement of Cash Flows: This tracks the movement of cash both in and out of the company, categorized by operating, investing, and financing activities. In other words, where is the cash coming from and where is it going?

Playing by the Rules: GAAP and SEC Regulations

These financial statements can’t just be willy-nilly numbers cooked up in someone’s basement. Nope! There are rules—lots of them. That’s where GAAP (Generally Accepted Accounting Principles) comes in. GAAP is a common set of accounting principles, standards, and procedures that companies must follow when compiling their financial statements. It ensures that everyone’s playing by the same rules and makes it easier to compare apples to apples.

And then we have the SEC (Securities and Exchange Commission), the grand poobah of financial regulation. The SEC has its own rules about what companies need to disclose and how. They’re like the referees, making sure everyone plays fair and investors are protected. It’s also worth noting that these SEC rules are usually the same, or more stringent than, GAAP requirements!

The Watchdogs: The Role of Auditors

Finally, there’s one more piece to the puzzle: auditors. Think of them as the independent fact-checkers. Auditors are external accounting firms who review a company’s financial statements to make sure they’re accurate and comply with GAAP and SEC regulations. They issue an opinion on whether the statements present a fair picture of the company’s financial position. If the auditors give the financials a thumbs up, you can feel a lot more confident that the numbers are legit.

Navigating the Labyrinth: SOX and Dodd-Frank – The Gatekeepers of Public Companies

Okay, folks, let’s talk about the rules of the game – the regulatory landscape that public companies have to navigate. Think of it as the grown-up version of “Simon Says,” but with a lot more at stake than just looking silly. Two colossal pieces of legislation dominate this landscape: the Sarbanes-Oxley Act (SOX) and the Dodd-Frank Act. Let’s break them down in a way that hopefully doesn’t require a law degree to understand.

SOX: The Sheriff That Rode into Town After the Accounting Wild West

Picture this: It’s the early 2000s, and corporate America is looking a bit like the Wild West. Accounting scandals at companies like Enron and WorldCom have left investors feeling like they’ve been robbed blind. Enter the Sarbanes-Oxley Act (SOX) of 2002, a law designed to clean up the mess and restore faith in the markets.

SOX’s Key Directives:

Increased Corporate Responsibility: CEOs and CFOs suddenly had to personally certify the accuracy of their companies’ financial statements. No more “oops, I didn’t know” excuses! They are held accountable.
Enhanced Financial Disclosures: Companies had to be much more transparent about their finances, disclosing more information and in plain English, please. This ensures that investors are well-informed, preventing them from being taken advantage of due to insider information.
Creation of the Public Company Accounting Oversight Board (PCAOB): This independent board was created to oversee the audits of public companies. This is the police of the Sheriff, ensuring compliance and fair-play.
Strengthened Internal Controls Over Financial Reporting: Companies had to implement robust internal controls to prevent fraud and errors. Think of it as putting better locks on the vault. SOX requires companies to establish, maintain, and regularly assess the effectiveness of their internal controls over financial reporting.

Dodd-Frank: The Post-Crisis Cleanup Crew

Fast forward to 2008, and the financial world is in meltdown. The subprime mortgage crisis has triggered a global recession, and everyone’s looking for someone to blame. That’s when the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 came into play, designed to prevent another financial catastrophe.

Dodd-Frank’s Impact on Public Companies:

Executive Compensation: Dodd-Frank introduced new rules on executive pay, including say-on-pay votes (allowing shareholders to voice their opinion on executive compensation packages) and clawback provisions (allowing companies to recover previously awarded compensation from executives in certain circumstances). Basically, it’s about making sure executives are paid fairly and held responsible for their actions.
Corporate Governance: The act also brought changes to corporate governance, like requiring companies to disclose the ratio of CEO pay to the median employee pay. Transparency is key!
Whistleblower Protection: Dodd-Frank incentivizes individuals to report securities law violations by providing them with financial rewards and protection from retaliation. Think of it as offering a “get out of jail free” card for snitching on bad behavior. It significantly strengthened whistleblower protections.
Regulation of Financial Institutions: While not exclusively focused on public companies, Dodd-Frank implemented sweeping reforms to the financial system, including increased oversight of banks and other financial institutions, stricter capital requirements, and the creation of the Consumer Financial Protection Bureau (CFPB).

In short, both SOX and Dodd-Frank are like guardrails on the highway of the public markets, aiming to keep companies honest, protect investors, and prevent future disasters. Are they perfect? Of course not. But they’re a whole lot better than the Wild West days of the early 2000s.

The Big Players: The Role of Institutional Investors

So, you thought navigating the world of public corporations was just about understanding stocks and those yearly reports? Buckle up, buttercup! We’re diving into the deep end with the real power players: institutional investors.

Think of them as the big kahunas of the investment world. We’re talking about the folks who manage massive amounts of money—like, the kind of money that would make Scrooge McDuck blush. These aren’t your average Joes trading a few shares on Robinhood (although, bless their hearts!). We’re talking about mutual funds, those collections of investments aiming for growth, pension funds securing retirement for countless workers, hedge funds seeking sky-high returns with bold strategies, and insurance companies ensuring our financial safety nets. They pool money from a wide variety of sources and invest it in, well, just about everything! From stocks and bonds to real estate and even whiskey distilleries (okay, maybe not every institutional investor), they are the engine that can really move markets.

Now, you might be thinking, “Okay, big deal, they have a lot of money.” But here’s the kicker: these institutional investors wield serious influence on the stock market and even the companies they invest in. Because they trade in such huge volumes, their buying and selling activity can send shockwaves, affecting stock prices (for better or worse!). Imagine a few of these big guys decide to dump their shares of a particular company: its stock price will almost certainly plummet, triggering reactions from other investors. They can prop up the prices of companies they truly believe in, conversely. It’s like they’re conducting an orchestra, where a slight adjustment can change the melody of the entire market.

But their influence doesn’t stop at just moving share prices. These financial institutions also have a significant impact on corporate governance. Remember those shareholder rights we talked about? Well, institutional investors often own a large chunk of a company’s shares, giving them a powerful voice when it comes to proxy voting. They can vote on important matters like electing board members, executive compensation packages, and major corporate mergers or acquisitions. If they aren’t happy with how a company is being run, they can use their voting power to push for changes, or actively engage with management to steer the company in a new direction. They can either be friendly, or very, very unfriendly!

And speaking of steering companies in new directions, there’s been a huge surge of interest in ESG factors – that’s Environmental, Social, and Governance – in investment decisions. Many institutional investors are increasingly factoring in the environmental impact of a company, its social responsibility practices (like labor standards and community engagement), and its governance structure (how it’s managed and held accountable) when making investment decisions. This means that companies that prioritize sustainability, treat their workers well, and have strong ethical leadership are more likely to attract these big investors. Think of it as voting with their dollars! It creates enormous pressures on corporations to value more than just profit; it forces them to think about their impact on the world.

So, there you have it! Public corporations can seem complex, but at their core, they’re just companies that have decided to share ownership with the public. Hopefully, this breakdown has cleared things up and given you a better understanding of what makes a company a public corporation.