A company owned by shareholders whose shares can be traded openly on the stock market is a

A company owned by shareholders whose shares can be traded openly on the stock market is a

• A. Sole trader
• B. Public limited company
• C. Partnership
• D. Private limited company

Answer: (B)

When shares can be bought and sold on the stock market, the business is set up to raise money from the public and limit the personal liability of owners. That describes a public limited company. Such companies offer shares to the general public and are typically listed on a stock exchange, allowing broad investor participation and easier access to capital. In contrast, a sole trader is owned by one person with unlimited liability; a partnership involves two or more owners and is not publicly traded; and a private limited company has limited liability but its shares are not offered to the public and trade is restricted.

When shares can be bought and sold on the stock market, the business is set up to raise money from the public and limit the personal liability of owners. That describes a public limited company. Such companies offer shares to the general public and are typically listed on a stock exchange, allowing broad investor participation and easier access to capital.

In contrast, a sole trader is owned by one person with unlimited liability; a partnership involves two or more owners and is not publicly traded; and a private limited company has limited liability but its shares are not offered to the public and trade is restricted.