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

What are companies limited by guarantee?

      

What are companies limited by guarantee?

  

Answers


sharon
Under Section 4 (2) (b) of the Companies Act in a company limited by guarantee the members undertake to contribute a certain amount to the assets of the company in the event of the company being wound up.It is the members’ liability and not the companies’ liability which is limited. The company is liable to pay all its debts without any limitation of liability if it has adequate assets.If the assets are not adequate, then the company can only be wound up as a human being who fails to pay his debts. Then a guarantee company is the most suitable if the company is non profit making.
sharon kalunda answered the question on April 15, 2019 at 05:28


Next: What are companies limited by shares?
Previous: Outline the guidelines on how to write an informal letter.

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


Learn High School English on YouTube

Related Questions