What is a defining trait of a public limited company?

A defining trait of a public limited company is that its shares are publicly traded. This means the company can offer its shares to the general public, usually through a stock exchange. This access to the capital markets allows public limited companies to raise significant amounts of capital by selling shares to a wide variety of investors. The structure provides liquidity for shareholders, enabling them to buy and sell shares relatively easily.

This characteristic distinguishes public limited companies from private limited companies, which do not have publicly traded shares and typically have more limitations on how they can raise funds. Being publicly traded also subjects these companies to regulatory scrutiny and requirements for transparency, such as regular financial reporting.

In contrast, the other options outline characteristics that do not align with what defines public limited companies. For instance, the management structure being led by one individual typically describes private companies or sole proprietorships rather than public limited entities. The notion of having a limited number of shareholders, such as a maximum of 20, is also more indicative of private limited companies, which often do not exceed a specific number of shareholders. Lastly, limiting investments to local areas does not reflect the nature of public limited companies that seek capital from a broader, often global, investor base.