Question

Statement X:
As a corporate person, the company is not entitled to own and hold property in its own name.
Statement Y:
Member can claim ownership of any item of the company's assets.
Select the correct the answer from the options given below-

• A. Statement X is correct and Statement Y is correct explanation of Statement X
• B. Statement X is correct but Statement Y is not correct explanation of Statement X
• C. Statement X and Statement Y both are correct
• D. Statement X and Statement Y both are incorrect

Answer 1

The correct option is D Statement X and Statement Y both are incorrect

Corporate personality is the fact stated by the law that a company is recognized as a legal entity distinct from its members. A company with such personality is an independent legal existence separate from its shareholders, directors, officers and creators and can perform certain function such as owning and holding the property. This is famously known as the veil of incorporation. A company gain full ownership of property, any changes among individual membership would not affect the title. The property of a company is not the property of the shareholders; it is the property of the company. Each shareholder has no legal rights on the capital and assets held by the company.