What is limited in a company limited by shares or by guarantee?
Question and options
What is limited in a company limited by shares or by guarantee?
Powers of the shareholders
Liability of members
Capital of the company
Shares
Answer and explanation
Under section 2(22) of the Companies Act, 2013, a company limited by shares limits each member's liability to any amount unpaid on the shares held, and under section 2(21) a company limited by guarantee limits it to the amount the member undertakes in the memorandum to contribute on winding up. The company's own liability for its debts is not limited, and its capital can be altered.
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