Which statement best describes an LTD?

Which statement best describes an LTD?

• A. A private limited company whose shares are not publicly traded
• B. A public company whose shares are traded publicly
• C. A sole trader
• D. A partnership

Answer: (A)

An LTD is a private limited company—owned by shareholders, with limited liability, and its shares are not publicly traded. This means the business is a separate legal entity from its owners, and shareholders’ liability is limited to what they have invested, not their personal assets. Shares stay within a smaller group and transfers are typically restricted, unlike a public company where shares are bought and sold on the stock market. In contrast, a sole trader or a partnership isn’t structured as a company with share capital and has different liability implications. So the description that fits best is a private company whose shares are not publicly traded.

An LTD is a private limited company—owned by shareholders, with limited liability, and its shares are not publicly traded. This means the business is a separate legal entity from its owners, and shareholders’ liability is limited to what they have invested, not their personal assets. Shares stay within a smaller group and transfers are typically restricted, unlike a public company where shares are bought and sold on the stock market. In contrast, a sole trader or a partnership isn’t structured as a company with share capital and has different liability implications. So the description that fits best is a private company whose shares are not publicly traded.