Which type of company has shares traded on public stock exchanges, allowing individuals to buy shares?

Prepare for your IB Business Management Exam with multiple choice questions and in-depth explanations. Get ready to excel and achieve your goals!

A Public Limited Company is defined by its ability to issue shares that are traded on public stock exchanges. This means that individuals and institutional investors can buy shares freely, which facilitates capital raising and increases liquidity for shareholders.

Public Limited Companies are typically required to meet strict regulatory requirements, including the disclosure of financial information, which provides transparency to investors. The ability to attract a wide range of investors can enable these companies to raise substantial amounts of capital to fund growth and development.

In contrast, a Private Limited Company restricts share transfers and generally does not trade shares publicly, a Non-Profit Organization focuses on fulfilling a charitable mission without the aim of generating profit for shareholders, and a Cooperative is owned and operated for the benefit of those using its services, often involving a more limited trading of shares. These structures have distinct purposes and legal frameworks that differentiate them from Public Limited Companies.

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