Practice question · Multiple choice
Two firms make the same product with the same headcount, one as an S.L. and one as an S.A. Why does that difference matter to an outside investor?
Hints
- Both forms give limited liability, that is not the difference.
- Ask how an investor gets their money back OUT.
Show the answer
A. Because the S.A.'s shares move freely and the S.L. restricts them
Why
Legal form governs transferability, not size or liability. The S.A. is built for capital that must be able to leave; the S.L. for a closed group that wants control over who joins.
Practise Business Types
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