Equity shares form the bulk of the capital of a?

Step 1: Analyze the question The question asks which type of business gets most of its capital from equity shares (ordinary shares sold to shareholders).

Step 2: Explain the concept Equity shares (ordinary shares) represent ownership in a company. Shareholders get dividends and share in the profits and risks. The key points about each option:

• Private firm (A): This usually means a sole proprietorship or a private limited company. Capital comes mainly from the owner's savings or a small circle of members. Shares cannot be offered to the public.
• Public company (B): A public limited company (Plc) can invite the general public to buy its shares, usually through the stock exchange. Because it can sell shares to a very large number of investors, equity shares make up the bulk of its capital.
• Statutory company (C): This is created by an Act of Parliament or a decree, and is often government-owned. Examples are NNPC and the Central Bank. Its funds come mostly from government allocations, not from sale of shares.
• Limited partnership (D): This is formed by partners who contribute capital as partners. It does not raise money by issuing shares.

Step 3: Solve The business that raises most of its capital by selling equity shares to the public is the public limited company.

Step 4: Answer The correct option is B. public company.

Tip: Link "shares" to "public." If a question mentions the sale of shares to the general public, think of a public limited company (Plc). Also remember that government-owned bodies (statutory corporations) get funds from government, and partnerships get funds from the partners.