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Which of the following feature applies ONLY to a public company?
- a)Can start business after incorporation
- b)Has a restriction up to 200 members
- c)Can invite public to subscribe for its shares
- d)Directors are not required to obtain qualification shares
Correct answer is option 'C'. Can you explain this answer?
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Which of the following feature applies ONLY to a public company?a)Can ...
A private company has a restriction to invite share applications from public.
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Which of the following feature applies ONLY to a public company?a)Can ...
Public companies are a type of corporate entity that is allowed to offer its shares to the general public for subscription. They are subject to various regulations and requirements that are specific to their nature as publicly traded entities. One key feature that applies only to public companies is the ability to invite the public to subscribe for its shares.
Explanation:
Public companies have the unique advantage of being able to raise capital from the public by offering their shares for subscription. This means that any individual or institutional investor can purchase shares of the company and become a shareholder. This is a significant feature that distinguishes public companies from other types of entities, such as private companies.
Here is a detailed explanation of the given options and why they do not apply exclusively to public companies:
a) Can start business after incorporation
- This feature applies to both public and private companies. Once a company is incorporated, it can start its business operations.
b) Has a restriction up to 200 members
- This feature applies to private companies. Private companies are restricted to having a maximum of 200 members, excluding employees and ex-employees who are also members.
c) Can invite the public to subscribe for its shares
- This feature applies exclusively to public companies. Public companies have the ability to offer their shares to the general public for subscription, allowing anyone to become a shareholder.
d) Directors are not required to obtain qualification shares
- This feature applies to both public and private companies. Directors of a company are not required to obtain qualification shares, which means they do not need to own a specific number or value of shares in the company.
In conclusion, the feature that applies exclusively to public companies is the ability to invite the public to subscribe for its shares. This is a key characteristic that distinguishes public companies from other types of entities and allows them to raise capital from a wide range of investors.
Explanation:
Public companies have the unique advantage of being able to raise capital from the public by offering their shares for subscription. This means that any individual or institutional investor can purchase shares of the company and become a shareholder. This is a significant feature that distinguishes public companies from other types of entities, such as private companies.
Here is a detailed explanation of the given options and why they do not apply exclusively to public companies:
a) Can start business after incorporation
- This feature applies to both public and private companies. Once a company is incorporated, it can start its business operations.
b) Has a restriction up to 200 members
- This feature applies to private companies. Private companies are restricted to having a maximum of 200 members, excluding employees and ex-employees who are also members.
c) Can invite the public to subscribe for its shares
- This feature applies exclusively to public companies. Public companies have the ability to offer their shares to the general public for subscription, allowing anyone to become a shareholder.
d) Directors are not required to obtain qualification shares
- This feature applies to both public and private companies. Directors of a company are not required to obtain qualification shares, which means they do not need to own a specific number or value of shares in the company.
In conclusion, the feature that applies exclusively to public companies is the ability to invite the public to subscribe for its shares. This is a key characteristic that distinguishes public companies from other types of entities and allows them to raise capital from a wide range of investors.
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Which of the following feature applies ONLY to a public company?a)Can start business after incorporationb)Has a restriction up to 200 membersc)Can invite public to subscribe for its sharesd)Directors are not required to obtain qualification sharesCorrect answer is option 'C'. Can you explain this answer?
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