Private companies are often less well-known than their publicly traded counterparts but still have major importance in the world's economy.
For example, in 2008, the 441 largest private companies in the United States accounted for $1.8 trillion in revenues and employed 6.2 million people, according to Forbes.
This definition encompasses both publicly traded and privately held companies, as their investors are individuals.
For example, in the United States, privately held companies are not generally required to publish their financial statements.
By not being required to disclose details about their operations and financial outlook, private companies are not forced to disclose information that may potentially be valuable to competitors and so can avoid the immediate erosion of customer and stakeholder confidence in the event of financial duress.
Further, with limited reporting requirements and shareholder expectations, private firms are afforded a greater operational flexibility by being able to focus on long-term growth rather than quarterly earnings.
In addition, private company executives may steer their ships without shareholder approval, which allows them to take significant action without delays.
[4][5] In Australia, Part 2E of the Corporations Act 2001 requires publicly traded companies to file certain documents relating to their annual general meeting with the Australian Securities and Investments Commission (ASIC).
In Australia, section 113 of the Corporations Act 2001 limits a privately held company to 50 non-employee shareholders.