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CFA Level I · CFA Level I Exam · Organizational Forms, Corporate Issuer Features, and Ownership

Compared with a sole proprietorship, a publicly traded corporation is most likely to offer owners:

A publicly traded corporation most likely offers limited liability and easy transfer of ownership through tradable shares. Unlimited liability and simple reporting describe sole proprietorships, and direct management by every owner is not typical because ownership and control are separated in public corporations.

  1. Alimited liability and easier transfer of ownershipCorrect
  2. Bunlimited liability and simpler tax reporting
  3. Cdirect management control by every owner

Explanation

A corporation is a separate legal entity, so owners' losses are generally limited to their investment, and listed shares can be transferred easily. Unlimited liability is a feature of sole proprietorships, and public corporations face more complex reporting. Ownership is separated from management, so owners do not all manage directly.

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