Question

State with reasons whether the following statement true or false.

Share holders can manage the business.

Options

• True 

• False 

Answer 1

Share holders can manage the business : False
Explanation: All shareholders cannot manage the business. This is because shareholders are large in number and are spread across the globe. In this scenario, managing the business by shareholders would lead to chaos and confusion. That is why shareholders elect representatives (directors) who collectively manage the business.