GENERAL KNOWLEDGE

A FIRM IS SAID TO BE A PUBLIC JOINT-STOCK COMPANY WHEN IT

  • A. has unlimited liability
  • B. is administered by the public
  • C. is owned by the government
  • D. operates as a public corporation
  • E. sells its shares to members of the public ✓

 

The answer to the question is: E. sells its shares to members of the public

A public joint-stock company is a type of business entity that is owned by multiple shareholders and operates with the primary goal of generating profits for its owners. The shares of this company are publicly traded, meaning that they can be bought and sold by members of the public.

This also means that the ownership of the company is divided into shares that are available for purchase by anyone in the general public.

A public joint-stock company is characterized by the following features:

  1. Limited Liability: Shareholders in a public joint-stock company have limited liability, which means that their personal assets are protected from the company’s debts and liabilities.
  2. Ownership: The company is owned by multiple shareholders, who hold shares in the company. These shares can be bought and sold publicly, allowing for easy transfer of ownership.
  3. Management: The company is typically managed by a board of directors, who are elected by the shareholders. This structure ensures that the company’s management is accountable to its owners.
  4. Public Trading: The shares of a public joint-stock company are traded on a public stock exchange, allowing for easy access to capital and the ability for investors to buy and sell shares.
  5. Regulation: Public joint-stock companies are subject to regulatory oversight by government agencies, such as securities and exchange commissions, to protect investors and ensure fair trading practices.