If a company suffers heavy losses and its assets are not sufficient to pay off its liabilities, the balance can be recovered from the personal property of its members." do you agree? Give reasons.
Answers
Answer:
Explanation:
Normally companies are formed as limited companies. Limited companies means the liability of the member is limited. Members are not required to pay in excess of their liability.
If company is limited by guarantee then members have to pay the unpaid amount guaranteed by them. Means at the time of formation all member determine the amount that would be contribute by them. If any amount is unpaid then they are liable to pay that. If whole amount have been paid then they need not to pay anything.
If company limited by shares members are require to pay the unpaid amount of shares. Means if a person has bought 100000 shares of Rs 10 each on which he had paid Rs 7 per share then he will pay balance amount of Rs3X100000=Rs300000 and nothing else. If whole amount had been paid then he had to pay nothing.
In case Unlimited company(which is normally not formed) then his private property can be used for payment.
Explanation:
If a company suffers heavy losses and its assets are not enough to pay off its liabilities, can the
balance amount be recovered from the private assets of its members? Give reason in support of
your answer. 1