ExpertEasy1 markMultiple Choice
AQA GCSE · Question 01.5 · Business in the real world
Which of the following types of business ownership has shareholders, but cannot advertise its shares to the general public?
Which of the following types of business ownership has shareholders, but cannot advertise its shares to the general public?
Answer options:
A.
Partnership
B.
Private limited company
C.
Public limited company
D.
Sole trader
How to approach this question
The question has two conditions: 1) has shareholders, and 2) cannot sell shares to the public.
1. Eliminate options without shareholders: Sole trader and Partnership.
2. Compare the remaining options: Private limited company (Ltd) and Public limited company (Plc).
3. A Plc can sell shares to the public, whereas an Ltd cannot. Therefore, the correct answer is Private limited company.
Full Answer
B.Private limited company✓ Correct
The correct answer is B. A private limited company (Ltd) is owned by shareholders, but its shares are not available to the general public on the stock market. They are typically sold privately to friends, family, and associates.
A private limited company (Ltd) is a type of business structure that is a separate legal entity from its owners. It is owned by shareholders, who have limited liability. A key feature of an Ltd is that its shares cannot be offered to the general public. In contrast, a public limited company (Plc) can sell its shares on a public stock exchange.
Common mistakes
✗ Confusing private and public limited companies. The key distinction is the ability to sell shares to the public.
Practice the full AQA GCSE Business Paper 2
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