Question

Assertion (A): Public company can’t invite public to subscribe to its shares or debentures.
Reason (R): Private company can invite public to subscribe to its securities.
(a) Both (A) and (R) are correct.
(b) Both (A) and (R) are incorrect.
(c) (A) is correct but (R) is incorrect.
(d) (A) is incorrect but (R) is correct.

Answer 1

Answer:

Both A and R are incorrect

Explanation:

Public company can provide prospects but private company can't

The statements given here are totally reverse

Hope it helps you

Answer 2

The correct option is (b) Both (A) and (R) are incorrect.

• A public company can issue the prospectus for inviting invitation for investment from public.
• A prospectus is a document drawn up by the company that sets out the details of the offer of shares/securities for sale to the public for direct investment.
• The prospectus may be issued by a publicly listed company intending to offer shares or debentures. It is undertaken to quickly raise the required funds from the public.
• A private company is forbidden to allegedly invite the people for their share subscription and can therefore not issue a prospectus.