CAF-4 · Chapter 20 · Question 10 of 15
Maroon (Private) Limited wants to raise capital by issuing shares to the general public. What must the company do regarding its status before it can proceed?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) It must convert its status into a public company and remove the word '(Private)' from its name.
Explanation
A private company is legally restricted from inviting the general public to subscribe to its shares. To do so, it must alter its memorandum and articles to convert into a public company, removing '(Private)' from its name.
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