All India Bar Examination (AIBE) 4-IV Previous Year Question Papers with Answers

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83.

Free transferability of shares is mandatory in a

A: Listed Company
B: Company Ltd by shares
C: Public Ltd. Company
D: Foreign Company

The answer is: C

Explanation

The correct option is C: Public Ltd. Company.

A public limited company is a type of company that offers its shares to the public and has limited liability. According to Section 58 (2) of the Companies Act, 2013, the shares or debentures and any interest therein of a public company shall be freely transferable, subject to the provisions of the Act. This means that a public company cannot impose any restrictions on the transfer of its shares, unless there is a specific law or regulation that requires such restrictions. For example, a public company listed on a stock exchange may have to follow the rules and regulations of the stock exchange regarding the transfer of its shares.

A listed company is a public company whose shares are traded on a stock exchange. Therefore, option A is also correct, but option C is more general and covers both listed and unlisted public companies.

A company limited by shares is a company that has share capital divided into shares of a fixed amount. The liability of its members is limited to the amount unpaid on their shares. A company limited by shares can be either a private or a public company. Therefore, option B is incorrect, as it does not specify whether the company is private or public.

A foreign company is a company that is incorporated outside India but has a place of business in India. A foreign company can be either a private or a public company, depending on its shareholding structure and the laws of its country of incorporation. Therefore, option D is incorrect, as it does not specify whether the company is private or public.