What is the defining feature of a private corporation?

• A. Shares are available for purchase by the general public
• B. Shares are traded on public exchanges
• C. Shares cannot be publicly bought and sold
• D. It must be owned by the government

Answer: (C)

The defining feature of a private corporation is that shares cannot be publicly bought and sold. This characteristic distinguishes private corporations from public corporations, which have their shares available for purchase by the general public and traded on public exchanges. In a private corporation, the ownership is typically restricted to a small group of individuals, such as family members or a specific set of investors. The inability to trade shares publicly means that private corporations are often less regulated than public corporations, allowing them more flexibility in their operations and decision-making processes. This structure also allows private corporations to maintain greater control over business decisions without the pressure of public shareholder demands.