Question

Which of the following statement is not a feature of a Company?
(a) Separate legal entity
(b) Perpetual Existence
(c) Members have unlimited liability​

Answer 1

Answer:

(C) Members have unlimited liability.

Option C is the correct Answer. Members have limited liability.

Explanation:

Company is formed by the group of shareholders generally more than 2.

It is a distinct legal entity formed under the company act 2013.

It will have perpetual existence i.e. members or share holders may come  and go, but the company will continue its regular proceedings.

Members/ Shareholders have limited liability to the extent of the shareholding.

Answer 2

C. Members have unlimited liability is not a feature of a company.

Meaning of Company:

• A company is a legal entity formed by a person or group of persons to carry out a business organisation for commercial or industrial profits.
• A company may either be a public sector or a private sector organisation.

Features of Company:

1. It is necessary to get a company registered.
2. A. It is a separate legal entity.
3. B. It has perpetual existence. This means that even if the founder of a company takes ill, the company shall continue to function.
4. The members have limited liability. Since a company has separate legal status, the persons are not liable to pay any dues of the company.

Hence, the members are separate from the company and do not have unlimited liability.