For an example Berkshire Hathaway buys a company and the company they buy always goes from public to private. If my corporation buys all the outstanding stock of another company like McDonalds does McDonalds become private or does it stay public? Also if it goes private and becomes a subsidary of my company how will it continue to have excess capital if it is no longer public and will that mean my company that bought it will have to finance McDonalds if it is private since investors can no longer contribute? Serious question, no stupid answers please. Thanks everybody.
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if a public company buys all the outstanding stock of another company, the company that is bought becomes a wholly owned subsidiary of the company that bought it. since the company that bought the stock (the holding company) is not private, neither are the subsidiaries that it owns.
No, because the bought company can still sell more shares, up to the amount of shares they are authorized to sell, and the board of directors can also increase the number of authorized shares.
The buying company can sell some or all of their shares.
They may even keep the same board of directors and corporate officers.
You can get more complex also, with different classes of stock, common stock and preferred stock, some with voting rights and some without voting rights.
Consider if the company bought all of the common stock with voting rights, but not the preferred stock, which does not have voting rights.