Theory question 103
Company Accounts(a) Outline three distinguishing features of public and private companies.
(b) State three rights available to an ordinary shareholder.
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(a) Any three: a public company may invite the public to buy its shares and debentures; a private company may not. Public company shares are freely transferable and may be quoted on the stock exchange; a private company restricts transfer and is not quoted. A public company has no maximum number of members (minimum 7 or 2 depending on country); a private company has a maximum (about 50). A public company must publish its accounts; a private company need not. Name ends in 'Plc' for public, 'Ltd' for private.
(b) Any three: to vote at general meetings; to receive dividends declared; to share in surplus assets on liquidation; to transfer/sell shares; to attend the AGM and receive the annual report; to appoint a proxy.
Contrast the two types point by point.