Privatisation, also spelled privatization, may have several meanings. Primarily, it is the process of transferring ownership of a business, enterprise, agency, public service, or public property from the public sector (a government) to the private sector, either to a business that operates for a profit or to a nonprofit organization. It may also mean government outsourcing of services or functions to private firms, e. g. revenue collection, law enforcement, and prison management.
Privatization has also been used to describe two unrelated transactions. The first is the buying of all outstanding shares of a publicly traded company by a single entity, making the company privately owned. This is often described as private equity. The second is a demutualization of a mutual organization or cooperative to form a joint-stock company ? Definition of Privatization 1) The transfer of ownership of property or businesses from a government to a privately owned entity.
2) The transition from a publicly traded and owned company to a company which is privately owned and no longer trades publicly on a stock exchange. When a publicly traded company becomes private, investors can no longer purchase a stake in that company. 3)The process in which a publicly-traded company is taken over by a few people is also called privatization. The stock of the company is no longer traded in the stock market and the general public is barred from holding stake in such a company.
The Essay on The Pros and Cons for the Company to Go Public
Small companies looking to further the growth of their company often use an IPO as a way to generate the capital needed to expand. Although further expansion is a benefit to the company, there are both pros and cons that arise when a company goes public. As such there is a need to evaluate the factors Starhill REIT took into consideration before issuing their IPO. The factors, that is, the ...
EXAMPLE: If an individual or organization purchases all the stock in a publicly-traded company, that effectively makes it private, so that process is sometimes described as privatization. However, in contrast to the primary understanding of privatization, the company in question is in the private sector to begin with and remains there. Features of Privatization Espousing market principles by public policy makers has evolved as one of the prominent characteristics of the contemporary public enterprise management which encompasses privatization as a primary facet.
Privatization of State- owned enterprises has developed as a critical tool for economic policies pertaining to progress and development of developing countries. One of the prominent feature of privatization is the enhanced competitive characteristics it provides to the enterprises which prove to be fruitful for the business as well as the country. However, privatization contracts are greatly influenced by merger variables and even global issues and are structured on the basis of manipulation of the government and the private players along with the administering jurisdiction.
