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ACCA Applied Skills · Corporate and Business Law (Global) · Corporations and legal personality

Delmar Co wants to raise capital by offering its shares to the general public and having them traded on a stock exchange. Which type of company is generally permitted to do this?

A public company limited by shares that meets the capital and other requirements can offer shares to the public and list them. Private companies, whether limited by shares, guarantee or unlimited, are generally prohibited from public offers of securities.

  1. AA private company limited by guarantee
  2. BA public company limited by shares that satisfies the minimum capital and other requirementsCorrect
  3. CAn unlimited private company
  4. DA private company limited by shares with transfer restrictions

Explanation

Only a public company may offer its shares or debentures to the public, subject to requirements such as minimum capital. Private companies are generally prohibited from public offers. The guarantee company has no shares to offer.

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