BUISENESS MANAGEMENT
BUSINESS STRUCTURE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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to benefit from limited liability
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to benefit from government financial support
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to raise capital
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to increase the divorce between ownership and control
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Detailed explanation-1: -There are various reasons why a private company might want to become a public limited company, but the most common reason is to raise money in the public market by issuing shares. Investors who are eligible to participate in the stock market will be now able to trade a piece of the company.
Detailed explanation-2: -Conversion of Private Company into a Public Company opens a new door of opportunities, especially in the form of fundraising and reach of the market. The company can raise funds through Public Issue and accept deposits too. This structure is appropriate for the medium and large scale businesses.
Detailed explanation-3: -One of the key benefits of setting up as a private limited company is limited liability. Private limited companies are tax efficient as they can claim corporation tax relief on their profits. This can be a significant saving for businesses and increase profits.