Which statement describes a public limited company?

Which statement describes a public limited company?

• A. A company whose shares are offered to the public and are bought and sold on a stock exchange
• B. A private company with some shares traded
• C. A charity organization
• D. A sole proprietorship

Answer: (A)

A public limited company is a business whose shares are offered to the public and can be bought and sold on a stock exchange. This setup lets the company raise large amounts of capital from many investors, since anyone can buy shares (within regulatory rules). The shares are usually freely transferable, and the company is a separate legal entity with limited liability for shareholders. The other descriptions don’t fit a PLC: a private company does not sell its shares to the general public and is not listed on a stock exchange; a charity is a non-profit organization; a sole proprietorship is owned by one person and has no public share trading.

A public limited company is a business whose shares are offered to the public and can be bought and sold on a stock exchange. This setup lets the company raise large amounts of capital from many investors, since anyone can buy shares (within regulatory rules). The shares are usually freely transferable, and the company is a separate legal entity with limited liability for shareholders.

The other descriptions don’t fit a PLC: a private company does not sell its shares to the general public and is not listed on a stock exchange; a charity is a non-profit organization; a sole proprietorship is owned by one person and has no public share trading.