Private company. English ; a term applied (in contradistinction to a public company) to a
company public subscription to the stock of which is not invited. When a private business is
continued as a corporation instead of a partnership and stock is allotted to each partner for his
interest or share in the business the business is said to have been converted into a private
company. An entirely new business or enterprise, however, may be and often is started as a
private company instead of a partnership. Usually there is an agreement among the shareholders
(stockholders) whereby each is prohibited from disposing of or transferring his shares without the
consent of the others.