Which statement describes a Private Limited Company?

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Multiple Choice

Which statement describes a Private Limited Company?

Explanation:
Private limited companies are owned by private individuals and do not offer their shares to the general public. That restriction means they cannot issue shares to the public, which is why the statement describing it as unable to issue shares to the public is correct. In contrast, public limited companies can raise capital by selling shares to the public, so the other possibilities don’t fit. The idea of having unlimited capital isn’t accurate for a private company, since capital comes from its private shareholders and can’t grow without more shares being issued (within any applicable limits) or through borrowing, so it’s not unlimited.

Private limited companies are owned by private individuals and do not offer their shares to the general public. That restriction means they cannot issue shares to the public, which is why the statement describing it as unable to issue shares to the public is correct. In contrast, public limited companies can raise capital by selling shares to the public, so the other possibilities don’t fit. The idea of having unlimited capital isn’t accurate for a private company, since capital comes from its private shareholders and can’t grow without more shares being issued (within any applicable limits) or through borrowing, so it’s not unlimited.

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