Which statement best describes a private company’s restriction on membership?
Correct answer: B. It generally restricts the transfer of its shares
- A. It must have no shareholders
- B. It generally restricts the transfer of its shares
- C. It must sell shares only to the government
- D. It cannot appoint directors
Explanation
A private company generally places restrictions on the transfer of its shares and does not invite the public to subscribe for them. It can have shareholders and appoint directors within the applicable company law.
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About Nature and Forms of Business Organisation
Business organisation combines people, capital, materials and entrepreneurship to produce goods or services and earn profit, while also meeting customer and social needs. Coverage includes sole proprietorships, partnerships, companies and cooperatives, with comparisons of ownership, liability, control, profit sharing, continuity and legal status.
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