Which type of business can raise capital by selling shares?

• A. Sole trader
• B. Partnership
• C. Limited company
• D. Franchise

Answer: (C)

Raising capital by selling shares comes from having share capital, which only a limited company has. A limited company is a separate legal entity that can issue shares to investors, letting them buy ownership stakes and provide funds in exchange for a claim on profits. Sole traders and partnerships aren’t set up with shares, so they must rely on personal funds, loans, or bringing in new partners rather than selling shares. A franchise is a business model, not a legal form that inherently allows sharing ownership through shares, so it doesn’t by itself enable raising capital in that way.