Question

A shareholder in a public company transfers all their shares to a competitor, leading to significant changes in company control. The board of directors raises concerns about the implications. What feature of public companies allows such an event to occur?

Options

• Transferability of shares

• Perpetual succession

• Limited liability

• Common seal

Answer 1

Transferability of shares

Explanation:

In a public company, shareholders can buy and sell their shares without obtaining approval from the firm or other members. This free transfer of ownership can even lead to changes in control of the company.