The 500 shareholder rule requires the companies covered to register with the SEC, but not necessarily to publicly list their stock. They could register and stay private.
However, registration means that they have to publish almost the same information as public companies do and be subject to many of the same regulations. Since there are some benefits to going public, such as liquidity for current shareholders, few companies choose to register and stay private for very long.
However, registration means that they have to publish almost the same information as public companies do and be subject to many of the same regulations. Since there are some benefits to going public, such as liquidity for current shareholders, few companies choose to register and stay private for very long.