Which of the following statement is false:
5 points
1.A company is a legal entity quite distinct from its members.
2.A company can buy its own share
3.A shareholder is the agent of the company
4.Same person can agent and creditor of the company
Answers
Which of the following statement is false:
5 points
1.A company is a legal entity quite distinct from its members.
2.A company can buy its own share
3.A shareholder is the agent of the company
4.Same person can agent and creditor of the company
Explanation:
Ans
3.A shareholder is the agent of the company
It is false because although a shareholder owns shares in a company, he or she is not involved in the daily operations of the company and is not authorized to act as agent of the company.
A company is a legal entity quite distinct from its members.
A company is a legal entity and a persona at law. This means the company can sue or be sued. It can also own or sell property.
A company can buy its own share
A company can but its own shares if the company is of the opinion that the shares are undervalued. It buys them back to prevent value erosion.
Same person can agent and creditor of the company
The same individual can be both an agent a creditor of the company. The person may be the solicitor of the company and may also lend the company money through buying bonds of the company.