The company not being a separate entity, members are liable for its debt.

true

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false

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partly true

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partly false

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Solution

The correct option is A true
A company is a separate legal entity as distinct from its members. A company is a separate legal entity as distinct from its members, therefore it is separate at law from its shareholders , directors , promoters etc and as such is conferred with rights and is subject to certain duties and obligations. the liability of the members is limited, they cannot, only in exceptional circumstances be held liable for the companies debts.

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Similar questions

Q. State whether the following statements are True or False:
(a) A joint stock company is separate legal entity.
(b) A company survives even if all its members die.
(c) A joint stock company is a voluntary association of persons.
(d) A joint stock company is less stable than a partnership.
(e) Registration of a joint stock company is optional.
(f) There can be no conflict of interest in a joint stock company.
(g) A company is an artificial legal person.

Q. If company do not follow the principle of separate legal entity can be done______________.

A joint stock company is a group of people who come together to pursue a common economic objective, which leads to the formation of an entity that has a separate identity from its members.

Q. 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:

Q. 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.

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