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I tried Google but didn't find anything: Is (3) just a rule of thumb, i.e. "more than 500 is unmanageable without going public" or is there a law in the USA which forces companies to go public if they have more than 500 holders? And - why would there be such a law (if it exists)?

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The reason it exists is so companies don't end around the SEC and create unregulated stock markets. Once you get 500 shareholders you don't need to offer shares to the public, but you do need to release financials like you have (AKA send them to the SEC).

This is correct. Once a company has to go to the trouble of producing quarterly and annual financial reports and filing them with the SEC and making them available to the world, most companies conclude they might as well do a real IPO and get some pop from building a market in their stock.

ever heard about Wikipedia?

http://en.wikipedia.org/wiki/Public_company

http://en.wikipedia.org/wiki/Securities_Exchange_Act_of_1934

The 500 shareholders does seem to be written in law, however SEC seems to have the authority to make exemptions.

right answer, but I had to downvote you for being snarky.

thanks :)

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