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Which of the following characteristics is typical of a privately held corporation versus a publicly held corporation? Multiple Choice

a. Does not allow investment by the general public.
b. Fewer shareholders than publicly held corporation.
c. Does not need to file financial statements with the SEC.
d. All of the choices are typical characteristics of privately held corporations.

1 Answer

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Final answer:

The correct answer is option d. All listed choices are typical characteristics of privately held corporations, including investment restrictions, fewer shareholders, and no need to file with the SEC.

Step-by-step explanation:

The correct answer is option d. All of the choices are typical characteristics of privately held corporations. Privately held corporations do not allow investment by the general public, which is a distinction from publicly held corporations whose stock can be bought and sold on the stock market. Moreover, privately held companies often have fewer shareholders, which can result in fewer requirements regarding financial transparency and governance. One significant difference is that private corporations do not need to file financial statements with the Securities and Exchange Commission (SEC), unlike publicly held corporations which are required to do so for regulatory and investor scrutiny.

A privately held corporation does not allow investment by the general public, meaning that its ownership is restricted to a small group of individuals or entities. It also typically has fewer shareholders than a publicly held corporation, which may have thousands or even millions of shareholders. Lastly, a privately held corporation does not need to file financial statements with the Securities and Exchange Commission (SEC), unlike publicly held corporations, which are required to publicly disclose their financial information to maintain transparency.

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