Question

Which of the following statement is true and which is false?
P. A company being a body corporate can sue but cannot be sued in its own name.
Q. Members or shareholders are agents of a company. R. Members of a company cannot contract with company.
R. A partner's liability is always limited where as that of shareholder may be unlimited either by shares or a guarantee.

Select the correct the answer from the options given below-

P Q R

• A. True False True
• B. True True True
• C. False True True
• D. False False False

Answer 1

Answer: (D)

False False False

• A company is an artificial person. Being a body corporate, a company can sue and be sued in its own name. To sue means a company has right to start legal proceeding against or to bring a suit in a court of law. A company has separate legal entity so he can sue one of its own members for liable.
  
• In general terms, the principals of a corporation are the owners or investors, referred to as shareholders or stockholders. The agents of the corporation are generally considered to be the board of directors, officers or other persons the corporation authorizes to act on its behalf.
  
• In partnership each partner has unlimited liability and is personally liable for all the debts of the firm. In a company, on the other hand, a shareholder has limited liability – limited to the extent of the share capital.
  

All statements are false.