Private Company 30 March 2023 1 Min Read Last Update: 4 April 2023 Quiz Time Welcome to Private Company Quiz You can practice as many times as you want until you get all the answers 100% right. Let's get Started What is a benefit of appointing a board of directors for a private company? More taxation requirements Personal liability for directors Expertise and experience in decision-making Higher returns for shareholders What is a disadvantage of owning a private company? Limited liability for shareholders Tax advantages More flexibility in operations Double taxation What is a potential disadvantage of having a large number of shareholders in a private company? Lower returns for each shareholder Limited liability for shareholders Tax advantages for the company Higher flexibility in operations Which of the following is a characteristic of a private company? It can sell shares to the public It does not require a director It has unlimited liability for its shareholders It has a separate legal identity What is the auditing requirement for financial statements in a private company? It is optional It is mandatory It is required only for companies with more than 50 shareholders It is required only for companies with annual revenues over R1 million What is required for a private company to register with the registrar of companies? Drawing up a Memorandum of Incorporation Selling shares to the public Appointing a director Registering for tax purposes What is the purpose of issuing shares to shareholders for a private company? To reduce the amount of capital required to operate going forward To increase the number of shareholders To share profits in proportion to the number of shares held To limit the liability of shareholders What is the legal ending for the name of a private company? Corp LLC Pty Ltd Ltd Co What is the primary advantage of a private company having a separate legal identity? It allows the company to reduce its tax liability It protects the personal assets of the shareholders of the company It provides greater flexibility in decision-making It allows the company to enter into contracts in its own name What is a potential disadvantage of preparing annual financial statements for a private company? It is a legal requirement It can be expensive It provides transparency for shareholders It is required by the government 1 out of 10 Time is Up! Time's up Like what you read? Subscribe to our Newsletter Submit Subscribe to our email newsletter to get the latest posts delivered right to your email.