Private Company Quiz

What is the legal status of a private company?

• It is not a separate legal entity

• It is not recognized by the law

• It is a separate legal entity

• It is owned by the government

What is the motive for operating a private company?

• To avoid paying taxes

• To compete with other private companies

• To generate profit for expansion or funding projects

• To provide free services to the public

Who owns a private company?

• No one, it is owned by the public

• Employees

• Family members and shareholders

• Government

What is the main source of capital for private companies?

• Loans from financial institutions

• Retained earnings

• Issuance of shares

• Personal savings

What is the main advantage of a private company for shareholders?

• Shared liability

• No liability

• Limited liability

• Unlimited liability

What is the main disadvantage of a private company in terms of raising capital?

• Raising capital is easy

• Raising capital is time-consuming

• Raising capital is not restricted

• Shares can be sold on the stock market

What is the main advantage of a private company in terms of continuity?

• It is affected by changes in ownership

• It has continuity of existence

• It has to be reconstructed

• It is not legally recognized

What is the main disadvantage of a private company in terms of profits?

• Profits are not generated

• Profits are reinvested

• Profits are shared amongst a large group of people

• Profits are not shared

What is the main advantage of a private company in terms of control?

• No control over the business

• High possibility of loss of control to outsiders

• Control is shared with the government

• Low possibility of loss of control to outsiders

What legal documents are necessary to create and register a private company?

• Tax returns and audit reports

• Employee contracts and payroll records

• Memorandum of association and Articles of association

• Business plan and financial statements