Private or Public?

Have you ever heard of people referring to private and public companies, and you wondered what it really meant?  Does a private company 'hide' from others?  What does that really mean?

Public companies are organizations that have their shares listed on the stock exchange.  Anyone can purchase this company's shares, and that's why the company is called "Public".  

Private companies do not have their shares on a stock exchange.  The owner(s) hold their shares in the company and do not offer them to the general public for sale.

As an accountant (or accountant to be!), you're probably wondering whether there are any implications to this.  In Canada, different rules apply to different types of companies.  If a company is public, it must adhere to something called IFRS which stands for International Financial Reporting Standards.  If a company is public, it can also use IFRS, or stick with ASPE, which stands for Accounting Standards for Public Enterprises.

IFRS and ASPE are both types of "rules" that accountants must follow.  I promise to write a separate blog about these guys in the future.

Hope this isn't too confusing.  Let me know if you have any questions!