Which term describes a company whose shares are traded on a stock market?

• A. Public limited company
• B. Partnership
• C. Sole trader
• D. Private limited company

Answer: (A)

Shares being traded on a stock market means the business operates as a public company that can issue shares to the general public and have them bought and sold on an exchange. That setup is the defining feature of a public limited company. It allows the firm to raise capital from a broad investor base and gives it the ability to list its shares publicly, which is what stock markets are for.

In other types of business structures, this isn’t the case. A sole trader or a partnership isn’t a separate public entity with tradable shares on a market, and a private limited company can issue shares but only to a limited group and its shares aren’t traded on public stock markets.