<P> For many years, newly created companies were privately held but held initial public offering to become publicly traded company or to be acquired by another company if they became larger and more profitable or had promising prospects . More infrequently, some companies--such as investment banking firm Goldman Sachs and logistics services provider United Parcel Service (UPS)--chose to remain privately held for a long period of time after maturity into a profitable company . </P> <P> However, from 1997 to 2012, the number of corporations publicly traded on American stock exchanges dropped 44% . According to one observer (Gerald F. Davis), "public corporations have become less concentrated, less integrated, less interconnected at the top, shorter lived, less remunerative for average investors, and less prevalent since the turn of the 21st century". Davis argues that technological changes such as the decline in price and increasing power, quality and flexibility of computer Numerical control machines and newer digitally enabled tools such as 3D printing will lead to smaller and more local organization of production . </P> <P> A group of private investors or another company that is privately held can buy out the shareholders of a public company, taking the company private . This is typically done through a leveraged buyout and occurs when the buyers believe the securities have been undervalued by investors . In some cases, public companies that are in severe financial distress may also approach a private company or companies to take over ownership and management of the company . One way of doing this would be to make a rights issue designed to enable the new investor to acquire a supermajority . With a super-majority, the company could then be relisted, i.e. privatized . </P> <P> Alternatively, a publicly traded company may be purchased by one or more other publicly traded companies, with the target company becoming either a subsidiary or joint venture of the purchaser (s), or ceasing to exist as a separate entity, its former shareholders receiving compensation in the form of either cash, shares in the purchasing company or a combination of both . When the compensation is primarily shares then the deal is often considered a merger . Subsidiaries and joint ventures can also be created de novo--this often happens in the financial sector . Subsidiaries and joint ventures of publicly traded companies are not generally considered to be privately held companies (even though they themselves are not publicly traded) and are generally subject to the same reporting requirements as publicly traded companies . Finally, shares in subsidiaries and joint ventures can be (re) - offered to the public at any time--firms that are sold in this manner are called spin - outs . </P>

Who makes the decisions in a public limited company