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Business Studies

Prospectus

Private compa...

Question

Private companies cannot raise funds from the public.

A

True

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B

False

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Solution

The correct option is A
True

Private companies cannot raise funds from the public unlike public companies.

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Q. LLP can raise funds from public.

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.

State and explain the six steps required to raise funds from the public i.e., capital subscription by the company.

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. State with reason whether the following statement is true or false:
A private company can accept the deposits from the general public.

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