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Business Studies

Functions of Financial Market

Fill in the b...

Question

Fill in the blank:
The company which raises its capital by issuing shares to public is a __________.

A

public company

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B

private company

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C

joint stock company

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D

government organisation

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Solution

The correct option is D public company
A public company can raise its capital by issuing shares to public. For doing the same, it has to issue a prospectus which is an invitation to the public to subscribe to the capital of the company and undergo various other formalities.

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Select the term or a phrase which can substitute the following statement:

Name the company which raises it's capital by issuing shares to public.

Q. Mark the following statements True or False:
(a) A private company must file a statement in lieu of prospectus.
(b) A company which does not want to prepare its own Articles of Association can adopt Table A.
(c) A company wanting to raise capital must issue a prospectus.
(d) A private company can start its business immediately after incorporation.
(e) Capital clause is a part of the Articles of Association.
(f) The Memorandum of Association defines the relationship of a company with or outsiders.
(g) Every company must issue a prospectus to raise share capital.

Q. Public company having share capital which has not issued a prospectus of the company has to file a ___________ before its commencement.

Q. State whether the following statements are True or False.
(a) There is no chartered company in India.
(b) LIC is a statutory company.
(c) At least five persons are needed to form a public company.
(d) The minimum paid up capital of a private company must be Rupees five lakh.
(e) A private company can invite public deposits.
(f) The shares of a public company are transferable.
(g) A subsidiary of a public company is also a public company.
(h) The concept of private company deemed to be public no longer exists in India.

A prospectus is issued by

(a) A private company

(b) A public company seeking investment from public.

(c) A public enterprise

(d) A public company

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