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CS Executive · Setting Up of Business, Industrial and Labour Laws · Corporate Entities - Companies

Tara Enterprises Ltd is a company whose shares are freely transferable and which may invite the public to subscribe to its securities. Its articles do not restrict transfer. What type of company is it most likely to be, on the basis of access to capital from the public?

It is most likely a public company. Public companies may invite the public to subscribe to their securities and their shares are freely transferable, unlike private companies, which restrict share transfer and cannot invite the public.

  1. APublic companyCorrect
  2. BPrivate company
  3. COne Person Company
  4. DSection 8 company without share capital

Explanation

A public company is one that is not a private company; it can invite the public to subscribe to its securities and its shares are freely transferable. A private company restricts transfer of shares and prohibits invitation to the public. A One Person Company has a single member and is a type of private company.

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