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Question

In the case of a company limited by guarantee, the members are liable only to the extent of the _________ by them and not beyond, and only when the company goes into liquidation.

A
Nominal value of shares
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B
Amount guaranteed
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C
Market value of shares
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D
Rs 5 lakh
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Solution

The correct option is A Amount guaranteed
In a company limited by guarantee, all members are liable to pay the amount that they have guaranteed to pay to the company in the winding up of the company. Also, if the company has a share capital, the members are liable to pay unpaid calls on shares in addition to the guaranteed amount.

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