a brief description of a public company

1. Debtholders lend money to the
Shareholders are members company in exchange for
of the public who own the interest payments. Debtholders
company. Most shareholders Shareholders Debtholders may include unsecured lenders
have the right (a) to elect the (e.g. bondholders) or secured
members of the BOD who lenders (e.g., banks who have
oversee the management of the made loans to the company).
company, and (b) to vote on major Debtholders do not own the
company actions (e.g., the acquisition of company.
another company). Shareholders’ shares
become more valuable as a company The Board of Directors (BOD) of a public
earns profits. company oversees the management
Public decisions of the company and owes
Corporation fiduciary duties to the shareholders.
BOD Members of the BOD are usually also
shareholders, but this isn’t legally required.
Sub1 Sub2 Sub3
Public companies often own (directly or indirectly) subsidiaries,
which are separate legal entities through which the company may
Sub4 Sub5 own property and/or operate its business. Subsidiaries may be
domestic (U.S.) or foreign.