ECONOMICS (CBSE/UGC NET)

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ECONOMICS

FINANCIAL MARKETS

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Consider the following differences between private and public limited companies:1.In a private limited company there is restriction on the number of members, whereas no such restriction is applicable on a public limited company. 2.A private limited company can be listed on a stock exchange, whereas a public limited company is always listed on a stock exchange. 3.A private limited company cannot issue debentures, whereas a public limited company can issue debentures. Select the correct answer using the codes given below:
A
1 only
B
2 and 3 only
C
1 and 3 only
D
1, 2, and 3
Explanation: 

Detailed explanation-1: -Public limited companies (PLCs) are similar to private limited companies, in the sense that they are legally distinct entities with their own assets, profits and liabilities. However, shares in a public company can be freely sold and traded to the general public and their shares can be listed on a stock exchange.

Detailed explanation-2: -The main difference between a private vs public company is that the shares of a public company are traded on a stock exchange, while a private company’s shares are not.

Detailed explanation-3: -In most cases, a private company is owned by the company’s founders, management, or a group of private investors. A public company is a company that has sold all or a portion of itself to the public via an initial public offering.

Detailed explanation-4: -Ltd denotes a Public Limited Compan, on the other hand, Pvt Ltd means a Private Limited Company. An enterprise is referred to as private limited only if all its shares happen to be distributed among private entities. A band of promoters own a Pvt Ltd Company.

There is 1 question to complete.
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