Which statement describes how public companies differ from private ones?

Which statement describes how public companies differ from private ones?

• A. They require no directors
• B. They must have a minimum issued share capital of £50,000, at least two directors and a company secretary
• C. They cannot have a company secretary
• D. They are never listed on a stock exchange

Answer: (B)

Public companies have stricter statutory requirements than private ones because they can raise money from the public and must meet governance standards to protect investors. The statement reflects those formal requirements: a public company must have a minimum issued share capital of £50,000, at least two directors, and a company secretary. This combination ensures there is sufficient capital to support the business and a governance framework with oversight. The other ideas don’t fit because a public company does need directors, cannot be without a company secretary, and may be listed on a stock exchange, not forever excluded from listing.

Public companies have stricter statutory requirements than private ones because they can raise money from the public and must meet governance standards to protect investors. The statement reflects those formal requirements: a public company must have a minimum issued share capital of £50,000, at least two directors, and a company secretary. This combination ensures there is sufficient capital to support the business and a governance framework with oversight.

The other ideas don’t fit because a public company does need directors, cannot be without a company secretary, and may be listed on a stock exchange, not forever excluded from listing.