Private companies can and do have shares; it’s how ownership is distributed amongst individuals.
All it means is that those shares are not available for public trading on stock exchanges. Instead, the shares are owned and traded privately among a select group of investors.
Huh, good point, I never thought about that. Makes sense. I only ever heard about options to get shares when the company becomes publicly traded. Of course, publicly traded is what I meant.
Correct; for private companies, any net profit after taxes can be distributed to shareholders as dividends.
Most companies will keep some cash on hand to cover a negative performing period (ie. when costs exceed revenue), so not all profits would be distributed every quarter.
Private companies can and do have shares; it’s how ownership is distributed amongst individuals.
All it means is that those shares are not available for public trading on stock exchanges. Instead, the shares are owned and traded privately among a select group of investors.
Huh, good point, I never thought about that. Makes sense. I only ever heard about options to get shares when the company becomes publicly traded. Of course, publicly traded is what I meant.
Do the owners also get money based on the shares?
Correct; for private companies, any net profit after taxes can be distributed to shareholders as dividends.
Most companies will keep some cash on hand to cover a negative performing period (ie. when costs exceed revenue), so not all profits would be distributed every quarter.