Simple English definitions for legal terms
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Going private refers to the process of changing a company from being publicly traded to privately owned. This is done by terminating the company's status with the Securities and Exchange Commission (SEC) and having its publicly held shares acquired by a single shareholder or a small group. Essentially, it means that the company will no longer be listed on a stock exchange and will not have to disclose financial information to the public.
Definition: Going private is the process of changing a public corporation into a close corporation. This is done by terminating the corporation's status with the SEC as a publicly held corporation and having its outstanding publicly held shares acquired by a single shareholder or a small group.
Example: A company that is publicly traded on the stock market may decide to go private. This means that the company will no longer be listed on the stock market and its shares will no longer be available for purchase by the general public. Instead, the company's shares will be owned by a single shareholder or a small group of shareholders.
Explanation: Going private allows a company to operate without the scrutiny and regulations that come with being a publicly traded company. It also allows the company's management to focus on long-term goals without the pressure of meeting short-term earnings expectations. However, going private can also limit the company's ability to raise capital and may make it more difficult to sell shares in the future.