Question10 Which one of the following options best describes the key feature that distinguishes a public corporation from other business structures? Shareholders are personally liable for all company debts Capital can only be raised through private placements and rights issues None of the options are correct Ownership is represented by shares that can be freely traded on a stock exchange Managers and shareholders are always the same individuals ResetMaximum marks: 1 Flag question undefined

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Question10 asks us to identify the feature that best distinguishes a public corporation from other business structures.
Option 1: 'Shareholders are personally liable for all company debts' — This describes unlimited personal liability, which is characteristic of sole proprietorships or general partnerships, not corporations. In public corporations, shareholders typically enjoy limited liability.
Option 2: 'Capital can only be raised through private placements and rights issues' — This is inaccurate for a public corporation. Public companies have access to capital markets and can raise funds through public offerings, not just private placements and rights issues.
Option 3: 'None of the options are correct' — Given the standard understanding of public corporations, this option would be incorrect because there is a statement in the list that correctly captures a defining feature.
Option 4: 'Ownership is represented by shares that can be freely traded on a stock exchange' — This reflects a core characteristic of public corporations: ownership is through shares, and those shares are typically traded on a stock exchange, enabling liquidity and transferability.
Option 5: 'Managers and shareholders are always the same individuals' — This is false. In most public corporations, managers (executives and directors) are distinct from the shareholders, who elect the board and influence major decisions but do not usually manage day-to-day operations.

Putting the pieces together, the statement about freely traded shares aligns with the defining aspect that sets public corporations apart from other structures, while the other options describe scenarios that do not apply to typical public-company features.

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