Which of the following features distinguishes a public limited company from a private limited company?

A. perpetual existence
B. limited liability
C. legal entity
D. sales of shares to the public

Correct Answer: Option D

D. sales of shares to the public

Explanation

A private limited company is a business entity that is held by private owners. However, private limited companies do not need to issue a prospectus because the public is not invited to subscribe for the shares of the company. A private limited company needs a minimum of only 2 directors. a private company, the number of shares traded is relatively smaller and also the traded shares are owned by limited individuals.

On the other hand, the shareholders in a public limited company are the public. A company whose securities are traded on a stock exchange and can be bought and sold by anyone. Public companies are strictly regulated and are required by law to publish their complete and true financial position so that investors can determine the true worth of it’s stock (shares). Also called publicly held company.