if a state owned firm is sold through the stock market, the organisation becomes?
Answer Details
If a state-owned firm is sold through the stock market, the organization becomes a public limited company or a PLC. A public limited company is a type of company that has its shares available for public purchase and is owned by shareholders who hold a portion of the company's equity.
When a state-owned firm is sold through the stock market, the government relinquishes its ownership of the company, and the company is no longer a public corporation or state-owned enterprise. Instead, it is run by a board of directors who are elected by the shareholders, and the company is obligated to disclose its financial information to the public.
Becoming a PLC has several advantages, such as access to additional capital through the sale of shares, increased marketability, and better ability to attract investors. However, it also comes with increased scrutiny from regulatory bodies and requires compliance with certain regulations.
In summary, selling a state-owned firm through the stock market transforms the organization from a public corporation into a public limited company, owned by shareholders who can buy and sell shares in the open market.