Final answer:
A small restaurant chain owned by shareholders who purchase their shares on the stock exchange represents a publicly held corporation. Public companies are managed by boards and their stock is available to the public, unlike private companies that don't sell shares to the public.
Step-by-step explanation:
The example that describes a publicly held corporation is: A small restaurant chain, founded and operated by a single family, is owned by shareholders who purchase their shares on the stock exchange. This scenario represents a public company because the ownership is through shares that are bought and sold on the stock exchange, making it accessible to the public investors. Publicly held corporations are distinct from private companies, which can be sole proprietorships, partnerships, or privately held corporations that do not issue publicly traded stock.
Private companies are usually owned and operated by their founders or a group that does not sell shares to the public. However, a public company sells stocks that investors can buy and sell, and is managed by a board of directors elected by its shareholders. Corporate governance is the system that oversees the management of a public company to ensure the interests of shareholders are being served.