The Flying Capacitor Converter (FCC) offers an attractive alternative to conventional 2-level converter topologies due to the easily acquired high number of voltage levels and the increased effective switching frequency. However, balancing of the flying capacitor (FC) voltages is crucial in practice since a deviation from the nominal voltage levels increases harmonics in the output voltage and, more importantly, jeopardizes the integrity of the converter due to overvoltages across the power transistors. Modulation inherent FC balancing techniques (termed natural/passive balancing) have been thoroughly analyzed in literature, however only for stationary operating conditions. In this paper, the behavior of the FCC and the effectiveness of passive balancing will be analyzed in detail regarding specific operating conditions present in typical industry applications such as converter start-up, shut-down, standby and operation under fault conditions. The basis for the analysis is a 5-level, 2 kW FCC embedded in two typical industry applications: single-phase PV inverter and single-phase PFC rectifier.