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JAMB Economics 1991 Question 26

Question 26

Business Organisations

A disadvantage of a joint-stock company is

  1. A.unlimited liability
  2. B.limited liability
  3. C.continuity
  4. D.loss of controlling interest
Show the answer and explanation

Answer: D (loss of controlling interest)

Explanation

As shares are sold widely, the founders may lose control of the company to other shareholders. Limited liability and continuity are advantages.