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The shares of a _______________ company can be freely transferable
  • a)
    Private ltd
  • b)
    Public ltd
  • c)
    Partnership
  • d)
    all of the above
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
The shares of a _______________ company can be freely transferablea)Pr...
Shares of a Public Limited Company are Freely Transferable

In response to the question, the correct answer is option B: Public ltd. The shares of a public limited company can be freely transferable. Here is a detailed explanation:

Definition of a Public Limited Company


  • A public limited company is a type of company that offers shares to the general public and is listed on a stock exchange.

  • It is required to have a minimum share capital and fulfill certain legal requirements.

  • Public limited companies are regulated by various laws and regulations to protect the interests of shareholders and the general public.


Features of a Public Limited Company


  • Shares are freely transferable: The shares of a public limited company can be freely bought and sold in the stock market without any restrictions.

  • Listing on stock exchange: Public limited companies are listed on stock exchanges, providing liquidity to their shareholders.

  • Minimum share capital: Public limited companies are required to have a minimum share capital as per the legal requirements.

  • Disclosure and transparency: Public limited companies are required to disclose financial information and maintain transparency for the benefit of shareholders and the public.

  • Separate legal entity: A public limited company has a separate legal entity from its shareholders, which means the company is liable for its own debts and obligations.

  • Limited liability: Shareholders of a public limited company have limited liability, meaning their personal assets are protected from the company's debts.


Comparison with other types of companies


  • Private limited company: Shares of a private limited company are not freely transferable. They are held by a limited number of shareholders and are not listed on a stock exchange.

  • Partnership: Partnerships do not have shares, as they are based on the partnership agreement between the partners. The ownership and transfer of partnership interests are governed by the terms of the partnership agreement.


In conclusion, the shares of a public limited company are freely transferable, which differentiates it from other types of companies such as private limited companies and partnerships.
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