ICANBusiness, Management and FinanceSources of Finance2023

Under the Companies and Allied Matters Act (CAMA) 2020, which of the following instruments can a private company lawfully issue to raise long-term finance from the general public?

AOrdinary shares offered through a public offer
BDebentures listed on the Nigerian Exchange Group (NGX)
CNeither shares nor debentures offered to the general publicCORRECT
DPreference shares offered through a prospectus
AI
Toaster Teacher
Why the answer is C, and why the others tempt you.
Section 22 of CAMA 2020 prohibits a private company from offering its shares or debentures to the public or allotting or agreeing to allot any shares or debentures with a view to offering them to the public. A private company must therefore raise equity and debt finance from private sources only. Options A, B, and D all involve public offerings, which are restricted to public companies.
Want this in Pidgin, Yoruba, Igbo or Hausa? Sign up free →

Practice more Business, Management and Finance questions

ICAN Business, Management and Finance has thousands more questions like this — with Worked answers on every one.

Start practicing free →See all Business, Management and Finance questions