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WAEC Financial Accounting 1992 Question 29

Question 29

Company Accounts

A private limited company is that which I. restricts the right to transfer its shares II. has a minimum of seven members III. limits membership to fifty IV. offers its shares for sale to the public.

  1. A.I and II only
  2. B.II and IV only
  3. C.I and IV only
  4. D.II and III only
  5. E.I and III only.
Show the answer and explanation

Answer: E (I and III only.)

Explanation

A private company restricts share transfers and has at most 50 members; it needs only two members and cannot offer shares to the public.