Define: Public Corporation

A public corporation is a type of corporation that is established by a government or governmental agency to perform specific functions or provide services to the public. Unlike private corporations, which are owned and operated by private individuals or entities, public corporations are owned and controlled by the government or a public authority. Public corporations may be created at the federal, state, or local level and can operate in various sectors, including transportation, utilities, healthcare, education, and infrastructure. These entities typically have their own legal status, governance structure, and funding mechanisms, and they may be subject to specific regulations, oversight, and accountability measures to ensure transparency, efficiency, and public trust. Public corporations often play a significant role in delivering essential services, managing public assets, and promoting economic development and social welfare in communities.

A public corporation is a company that issues shares or ownership to the general public. Such a company is said to be publically traded.

A corporation is a style of organization usually formed by filing articles of incorporation with the Secretary of State in your state of residence (though many corporations choose to incorporate in Delaware where corporation laws are considered favorable). Other styles of organization are sole proprietorship (a business owned by an individual) and a partnership (two or more individuals share in profits and liabilities).

Under corporation law, a corporation is treated as a legal individual. The corporation has its own identity, but the major advantage is that, unlike a partnership, the stockholders are not liable for the debts of the corporation. This facilitates the accumulation of capital and makes it possible to finance large ventures. Corporations must indicate their limited liability in their names with words like company, incorporated or in UK limited. Other forms of business organization are permitted to use the same designations even though they may not be incorporated.

Corporations issue shares of stock. Stockholders own the corporation. They control the corporation by voting their shares, though some corporations issue non-voting shares and some shares have more voting rights per share than others.

Many corporations are privately held. Shares of these private corporations are not sold to the public. Instead, the owners enjoy the limited liability of a corporation, but often shares to be sold are offered first to other shareholders for purchase.

Public corporations must register with the SEC, and many will file for listing on stock exchanges when they meet listing requirements. Usually, a privately held corporation goes public with an initial public offering (IPO) arranged through an investment banker.

This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

This glossary post was last updated: 29th March, 2024.