Question

A multinational company is a company having

• A. its registration in more than one country
• B. its operation beyond the country of origin
• C. its operation through more than five sea ports
• D. none of these

Hint:

Focus on where the company actually runs its business, not where it is registered.

Answer 1

The Correct Option is B

This question checks the standard definition of a multinational company (MNC) as used in economics and business studies.

1. Its registration in more than one country: This is not the defining feature. A company is legally registered, or incorporated, in one home country, even if it runs operations abroad.
2. Its operation beyond the country of origin: This is the accepted definition. A multinational company is one that owns or controls production or service operations, such as factories, offices or subsidiaries, in more than one country, beyond the country where it was originally set up.
3. Its operation through more than five sea ports: The number of sea ports a company uses for shipping has nothing to do with whether it counts as multinational.
4. None of these: This is wrong since the second option correctly defines a multinational company.

What makes a company multinational is that it carries out real business operations in countries other than its home country, not where it is registered or how it ships goods.

Let's summarize:

• An MNC is defined by having operations beyond its country of origin.
• Registration location and number of sea ports used are not part of this definition.

The correct answer is option (2), its operation beyond the country of origin.