Question

The liability of members if company is limited by shares is ________.

• A. unpaid value of shares
• B. guarantee amount
• C. unlimited liability
• D. none of the above

Answer 1

The correct option is A unpaid value of shares

Limited by shares means that the liability of the shareholders to creditors of the company is limited to the capital originally invested, i.e. the nominal and unpaid value of the shares and any premium paid in return for the issue of the shares by the company. A shareholder's personal assets are thus protected in the event of the company's insolvency, but any money invested in the company may be lost.