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Difference between Shares and Debentures

A member can ...

Question

A member can not be held liable for the acts of the company even if he holds virtually the entire share capital. This is related to:

A

An artificial person created by law

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B

Separate Legal Entity

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C

Perpetual Existence

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D

Common Seal

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Solution

The correct option is B Separate Legal Entity
A shareholder cannot be held liable for the acts of the company even if he holds virtually the entire share capital. The shareholders are not the agents of the company and so they cannot bind it by their acts.

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