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 KCSE business studies paper 1 revision questions and answers set 5

Give four main differences between a private limited company and a public limited company

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Answer Text:
-Private company has minimum of two shareholders and a maximum of fifty shareholder while a public limited company has a minimum of seven
shareholders and no maximum
-In private company share cannot be traded in the stock exchange market while in public share can be traded in the stock exchange market
-In private company, share can only be transferred with consent of all shareholders while in public company share is freely transferable
-private company cannot issue a prospectus whereas a public company can issue a prospectus
-In private company shares cannot be advertised while in public company, shares are advertised.