Private and Public Companies Flashcards
What is the main difference between a private limited company and a public limited company?
A) Public companies must have at least one director
B) Private companies can offer shares to the public
C) Public companies can offer shares to the public, private companies cannot
D) Private companies require a trading certificate to operate
C) Public companies can offer shares to the public, private companies cannot
(Under s755 CA 2006, private companies cannot offer shares to the public.)
What is the minimum share capital requirement for a public limited company (Plc)?
A) £1
B) £50,000
C) £10,000
D) No minimum
B) £50,000
(Under s763 CA 2006, a Plc must have at least £50,000 in share capital.)
Which of the following is NOT a requirement for a public company?
A) A company secretary
B) A minimum of two directors
C) A minimum of two shareholders
D) An Annual General Meeting (AGM)
C) A minimum of two shareholders
(A public company can have one shareholder under s7(1) CA 2006.)
Can a private company use written resolutions to pass shareholder decisions?
A) No, written resolutions are only for public companies
B) Yes, except for removing directors or auditors
C) Yes, but they must be unanimous
D) No, all resolutions must be passed in a general meeting
B) Yes, except for removing directors or auditors
(Private companies can pass written resolutions under s288 CA 2006, except for removing directors or auditors.)
XYZ Ltd is growing and its shareholders want to raise funds by offering shares to the public. What must they do first?
A) Register as a Plc
B) List on the London Stock Exchange
C) Apply for a trading certificate
D) Issue shares immediately
A) Register as a Plc
(A company must convert to a public company before offering shares to the public.)
ABC Plc wants to pass a shareholder resolution without holding a meeting. Can it use the written resolution procedure?
A) Yes, public companies can pass written resolutions
B) No, public companies cannot use written resolutions
C) Yes, but only if all shareholders agree
D) No, but they can use proxy votes
B) No, public companies cannot use written resolutions
(Under s288 CA 2006, only private companies can use written resolutions.)
DEF Plc has issued its shares to the public, but they are not traded on a stock exchange. What kind of company is it?
A) A private company
B) A listed company
C) An unlisted public company
D) A partnership
C) An unlisted public company
(Not all public companies are listed; some remain unlisted public companies.)
A newly incorporated private company has one shareholder, one director, and £10 in share capital. Can it legally trade?
A) Yes, as long as it is registered with Companies House
B) No, it must issue at least £50,000 in share capital
C) No, it must have at least two directors
D) Yes, but only if it is listed
A) Yes, as long as it is registered with Companies House
(Private companies do not have a minimum share capital requirement.)
A private company wants to avoid public financial disclosure but also needs limited liability. Which structure is best?
A) A partnership
B) A limited liability partnership (LLP)
C) A public company
D) A sole trader
B) A limited liability partnership (LLP)
(An LLP offers limited liability but avoids company-level taxation and stricter disclosure rules.)
A company has just been incorporated and issued £1 of share capital. What type of company is it?
A) A private company
B) A public company
C) A listed company
D) A subsidiary
A) A private company
(A private company can be incorporated with one share of any value.)
