1. One of the differences between a private and a public company is that:

Select one:

a. The shares of a private company are freely transferable on the Stock Exchange, while a public company can only offer shares to large institutional investors like Pension Funds.

b. A private company may raise capital from the public without issuing a prospectus but a public company must issue a prospectus in order to raise capital from the public.

c. A private company must not have more than one member while a public company may have as many members as it desires.

d. The purpose of a private company is usually to confer separate legal personality on the business of a sole trader or partnership while the purpose of the public company is to raise capital from the public to run the enterprise.

2. The Bubble Act was passed in order to:

Select one:

a. To enable the formation of 'deed of settlement companies', i.e. companies whose assets were held in a trust fund.

b. Prohibit any company from acting as a body corporate and from raising transferable stocks and shares without the legal authority of a Royal Charter or Act of parliament.

c.Bring about a statutory scheme for partnerships.

d. Make incorporation and limited liability available to any company mustering seven (7) subscribers.

3. Does the existence of corporate personality automatically mean there is limited liability?

Select one:

a. Yes because this was firmly established in Salomon v A Salomon & Co Ltd.

b. No because once a company fails the court will, in all cases, lift the veil.

c. Yes because the Companies Act says that a company has the rights powers and privileges of an individual.

d. No because the law allows a company to be registered as an unlimited company.