Which of the following business organization is allowed to raise capital by sales of shares to more than twenty people?

1. Analyze the question The question asks which type of business can sell shares to more than twenty people. So we are looking for the organization that is legally allowed to raise capital from the general public.

2. Explain the concept

• Sole proprietorship: Owned by one person. There are no shares, and capital comes from the owner's savings or loans.
• Partnership: Owned by 2 to 20 people. Under Nigerian law (the Companies and Allied Matters Act, CAMA), a partnership cannot have more than 20 partners, except in certain professional firms. Partners contribute capital but do not sell shares to the public.
• Private limited liability company (Ltd): Shares are held by a limited group of members, and the company cannot invite the public to buy its shares. Historically, the limit was 50 members.
• Public limited liability company (Plc): It can invite the general public to buy its shares, usually through the Stock Exchange. It has no upper limit on the number of shareholders. The minimum is 2 under CAMA 2020.

3. Step-by-step solution

• A: A partnership is limited to about 20 people and does not issue shares to the public. ✗
• B: A sole proprietor is a single owner with no shares. ✗
• D: A private company restricts the transfer of its shares and cannot offer them to the public. ✗
• C: A public limited liability company can sell shares to the public, so it can have well over twenty shareholders. ✓

4. Answer The correct option is C. Public limited liability company.

5. Exam tip Remember "Plc = Public = Pool of investors." If a question mentions the public, the Stock Exchange, or more than 50 shareholders, think Plc. Also remember that the partnership limit is 20, a number JAMB likes to test.