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Advantages of a Public Company

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Questions and Answers

What is the advantage of a public company in terms of raising funds?

Unlimited source of raising fund through public

What is a disadvantage of setting up and maintaining a public company?

Difficult legal requirements and high cost of formation

How does the movement of shareholders affect the existence of a company?

The existence of the company continues to exist

What is one advantage of a private company?

Private companies can raise capital through internal sources. Signup and view all the answers

How does the restriction on transferability of shares affect private companies?

It limits the transferability of shares if not provided for in the Articles of Association. Signup and view all the answers

Why can't private companies issue prospectus to the public?

Private companies are not allowed to issue prospectus to the public. Signup and view all the answers

What is a disadvantage of private companies in terms of financial liquidity?

Private companies have less financial liquidity due to restrictions on membership numbers. Signup and view all the answers

What is one advantage of a private company over a public company?

Secrecy can be maintained in a private company due to limited disclosure requirements. Signup and view all the answers

How does government intervention affect the operations of public companies?

Government intervention can slow down and decrease the flexibility of public company operations. Signup and view all the answers

What is a key difference between a public company and a private company in terms of share transferability?

Shares of a public company are freely transferable, while shares of a private company are not freely transferable. Signup and view all the answers