Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Shares

Question:

Which of the following is a feature of a private company?

Options:

Restriction on transferability of shares

Maximum no of members is 200

At least 2 person

All of these

Correct Answer:

All of these

Explanation:

The correct answer is option 4- All of these.

A Company is a legal entity formed individuals, shareholders, or investors coming together to conduct business for profit. The features of a company can vary based on its type (e.g., private , public, limited by shares, limited by guarantee) and the jurisdiction in which it operates. A private company is one which by its articles of association:
(a) Restricts the right to transfer its shares.
(b) A private company must have at least 2 persons, except in case of one person company.
(c) Limits the number of its members to 200 (excluding its employees).

Thus, all are features of private company so correct answer is option 4 i.e. all of these.