Question

Which of the following are not the disadvantages of incorporation?

• A. Formalities and expenses
• B. Corporate disclosure
• C. Limited liability
• D. Both (a) and (b)

Answer 1

The correct option is C Limited liability

Limited Liability:

The liability of the members of the company is limited to contribution to the assets of the company upto the face value of shares held by him. A member is liable to pay only the uncalled money due on shares held by him. If the assets of the firm are not sufficient to pay the liabilities of the firm, the creditors can force the partners to make good the deficit from their personal assets. This cannot be done in the case of a company once the members have paid all their dues towards the shares held by them in the company