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(a) Company limited by shares:
(i) This is a limited liability company.
(ii) Limitation of liability by shares means that a member can only be called upon to
contribute to the assets of the company the amount if any outstanding or unpaid on the
shares held beyond which the member is not liable.
(b) Company limited by guarantee:
(i) This is a limited liability company.
(ii) Limitation of liability by guarantee means that a member can only be called upon to
contribute to the assets of the company the amount he undertook to contribute if
the company was would up during his membership or within one year of cessation
of membership beyond which the member is not liable.
OR
Distinguish a company limited by shares from a company limited by guarantee
Under section 4 (2) (a) of the Companies Act, a company limited by shares means that a member thereof can only be called upon to contribute to the assets of the company the amount if any outstanding on his shares beyond which he is not liable.
Under section 4 (2) (b) of the Companies Act, company limited by guarantee means that a member can only be called upon to contribute to the assets of the company the amount he undertook to contribute, if the company was wound up during his membership or within 1 year of cessation of membership, beyond which he is not liable.
maurice.mutuku answered the question on April 30, 2018 at 07:19
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