Home » MCQs » Commerce MCQs » Business Studies MCQs

Whose liability is limited to the paid-up value of shares?

19. Whose liability is limited to the paid-up value of shares?

1. Partners
2. Manager
3. Employee
4. Shareholders

Answer: D) Shareholders

Explanation:

The liability of shareholders of a public company is limited to the paid-up value of shares. "Limited by shares" means that the liability of the shareholders to creditors of the company is limited to the capital originally invested, i.e. the nominal value of the shares and any premium paid in return for the issue of the shares by the company.