Get premium membership and access questions with answers, video lessons as well as revision papers.

What are companies limited by shares?

      

What are companies limited by shares?

  

Answers


sharon
Basically liability means the extent to which a person can be made to account by law. He can be made to be accountable either for the full amount of his debts or else pay towards that debt only to a certain limit and not beyond it. In the context of company law liability may be limited either by shares Under Section 4 (2) (a) of the Companies Act cap 486, a company limited by shares the members’ liability to contribute to the companies assets is limited to the amount if any paid on their shares.
They have to choose between a private company and a public company. Section 30 of the Companies Act defines a private company as one which by its articles restricts the rights to transfer shares; restricts the number of its members to fifty (50); prohibits the invitation of members of the public to subscribe for any shares or debentures of the company.

In order to form a public company, there must be at least seven (7) subscribers signing the Memorandum of Association whereas only two (2) persons need to sign the Memorandum of Association in the case of a private company.

sharon kalunda answered the question on April 15, 2019 at 05:26


Next: What is meant by the term Declaration of Compliance?
Previous: What are companies limited by guarantee?

View More CPA Company Law Questions and Answers | Return to Questions Index


Learn High School English on YouTube

Related Questions