Which type of business is owned by anyone who wants to buy stock?
1 Answer
Businesses that are set up as a separate legal entities where the equity is divided among individuals through shares of stock that are sold in the stock markets are "S Corporations."
Explanation:
Companies can be privately owned by families and individuals (Joe's Barbershop); partnerships (law firms), and by setting the company up as a separate legal entity where the company equity is divided as shares of stock.
There are a few types of stock companies, and a few more different types of stock.
Companies with few owners are often set up as LLCs, limited liability companies. These shares are not sold on the stock market.
When a company wishes to raise money for developing its business, or cashing out its original partners/owners by issuing shares of its equity to the public through a public offering, then the business has to convert to an S Corporation.
