What type of company allows public buying and selling of shares on the stock market?

What type of company allows public buying and selling of shares on the stock market?

• A. Private Limited Company
• B. Partnership
• C. Public Limited Company
• D. Sole Trader

Answer: (C)

A company that allows the public to buy and sell shares on the stock market is classified as a Public Limited Company. This type of company is required to meet specific regulatory requirements that govern its operations and financial reporting, making it more transparent and accountable to its shareholders. A Public Limited Company can raise capital by selling shares to the public, which provides it with greater access to funds for expansion and investment, thereby enhancing its growth potential. In contrast, a Private Limited Company does not allow shares to be sold publicly; it typically has a smaller number of shareholders and has restrictions on share transfers. Partnerships and sole traders are business structures that do not involve share capital in the same way that limited companies do; partnerships are formed by two or more individuals who share profits and responsibilities, while sole traders are individuals running their own businesses without forming a separate legal entity. Therefore, the only structure among the options that enables public trading of shares is the Public Limited Company.

A company that allows the public to buy and sell shares on the stock market is classified as a Public Limited Company. This type of company is required to meet specific regulatory requirements that govern its operations and financial reporting, making it more transparent and accountable to its shareholders. A Public Limited Company can raise capital by selling shares to the public, which provides it with greater access to funds for expansion and investment, thereby enhancing its growth potential.

In contrast, a Private Limited Company does not allow shares to be sold publicly; it typically has a smaller number of shareholders and has restrictions on share transfers. Partnerships and sole traders are business structures that do not involve share capital in the same way that limited companies do; partnerships are formed by two or more individuals who share profits and responsibilities, while sole traders are individuals running their own businesses without forming a separate legal entity. Therefore, the only structure among the options that enables public trading of shares is the Public Limited Company.