Which of the following conditions is a statutory requirement for a public limited company seeking to have its securities listed and traded on a recognized Stock Exchange?
- It must offer a specified minimum proportion of its issued share capital to the general public.Answer
- BIt must restrict the right of its existing shareholders to transfer their equity without prior board consent.
- CIt must obtain all its long-term expansion funds through short-term money market Treasury Bills.
- DIt must transfer majority voting control of its board to government regulatory authorities.
Answer
It must offer a specified minimum proportion of its issued share capital to the general public.
The correct answer highlights a fundamental statutory requirement for stock listing. A public limited company must offer a mandatory minimum portion of its issued shares to the public through a prospectus or offer for sale to ensure sufficient share liquidity and public participation on the stock exchange.
Step-by-Step Solution
Key Concept
Stock Exchange Listing Requirements for Public Limited Companies