Types of Limited Companies
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What is a key characteristic of a private limited company in terms of source of capital?

  • It can raise capital from a wide range of sources including the public
  • It can raise capital only from banks and other financial institutions
  • It is limited to raising capital from existing shareholders (correct)
  • It can raise capital through issuing bonds and debentures

    • What is a major advantage of a limited company?

  • It is a type of sole proprietorship
  • It is a type of partnership
  • It has a limited liability for shareholders (correct)
  • It has a higher set-up cost

    • What is a key difference between a private limited company and a public limited company in terms of ownership?

  • Ownership is transferable in both private and public limited companies
  • Ownership is transferable in public limited companies but requires approval from the stock exchange (correct)
  • Ownership is not transferable in private limited companies
  • Ownership is transferable in public limited companies but requires approval from the board of directors

    • Why are banks more willing to lend to limited companies?

    <p>Because of their better creditability</p> Signup and view all the answers

    What is a disadvantage of a limited company?

    <p>It has a higher set-up cost</p> Signup and view all the answers

    What is a key characteristic of a limited company in terms of its existence?

    <p>It is not affected by the death or bankruptcy of shareholders</p> Signup and view all the answers

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