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A public limited company can offer pre-emptive rights only to the mcq- Ans a) Public company 23 Which one of the following type of company requires only one director?A Private Company (Pty limited) is treated by South African law as a separate legal entity and has to register as a tax payer in its own right A Private Company (Pty limited) has a separate life from its owners and is required by the The Companies Act, No 71 of 08 to perform rights and duties of its own The owners of a Private Company (Pty

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The danger in granting them is that in later rounds you might find investors that are only willing to come into your company if they can acquire a sizeable portion of equity If at that time you have a lot of prorata and preemptive rights, you might not be able to • Offer For Sale (The company approaches members of the general public indirectly through intermediaries like issuing houses, stock brokers etc) • Private Placement (The company can raise finance by allotting securities to selective individuals and institutions only) • eIPOs (The investors may subscribe to the securities of a company

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