Liability of member
This query is : Resolved
13 April 2013
Liability of MEMBER in a limited company is unlimited?
13 April 2013
liability of member is only up to extent its share capital portion.
15 April 2013
9.5 Limited Companies
In such types of companies, the liabilities of members are always limited subject to some exceptions.
9.5.1 Companies limited by shares
These types of companies are quite common in commercial, trading and industrial world. Such companies are characterised with an authorised share capital of a certain amount, which is divided into units of definite sum called shares. The authorised share capital may comprise of more than one kind of shares, viz. ordinary or equity shares (voting and non-voting) and preference shares. The liability of each member of such company is limited to the unpaid amount of shares and premium, if any, held by him.
9.5.2 Companies limited by guarantee and having share capital
Such a company by way of undertaking in its Memorandum of Association restricts the liabilities of its members to a certain fixed amount, for payment of the debts and liabilities of the company in the event of winding up. The members are liable only for the amount contracted before he ceased to be a member or payment of the debts and liabilities within one year after he ceased to be a member. Such companies may also have share capital whenever necessary. In that event, the members will be liable for the amount, if any, remaining unpaid on the shares subscribed by them, in addition to the above guaranteed amount.
9.5.3 Companies limited by guarantee without having share capital
Companies limited by guarantee without having share capital are exactly similar in nature to the guarantee companies as referred above except that there will be no share capital. The members will be liable, in the circumstance referred to above, to contribute an amount not exceeding the sum specified in the Memorandum of Association.
9.6 Unlimited Companies
Such types of companies are analogous to that of partnership firm in respect of the liability of a member. Every member in such a company is jointly and severally liable for all the debts and liabilities of the company.
In such types of companies, the liabilities of members are always limited subject to some exceptions.
9.5.1 Companies limited by shares
These types of companies are quite common in commercial, trading and industrial world. Such companies are characterised with an authorised share capital of a certain amount, which is divided into units of definite sum called shares. The authorised share capital may comprise of more than one kind of shares, viz. ordinary or equity shares (voting and non-voting) and preference shares. The liability of each member of such company is limited to the unpaid amount of shares and premium, if any, held by him.
9.5.2 Companies limited by guarantee and having share capital
Such a company by way of undertaking in its Memorandum of Association restricts the liabilities of its members to a certain fixed amount, for payment of the debts and liabilities of the company in the event of winding up. The members are liable only for the amount contracted before he ceased to be a member or payment of the debts and liabilities within one year after he ceased to be a member. Such companies may also have share capital whenever necessary. In that event, the members will be liable for the amount, if any, remaining unpaid on the shares subscribed by them, in addition to the above guaranteed amount.
9.5.3 Companies limited by guarantee without having share capital
Companies limited by guarantee without having share capital are exactly similar in nature to the guarantee companies as referred above except that there will be no share capital. The members will be liable, in the circumstance referred to above, to contribute an amount not exceeding the sum specified in the Memorandum of Association.
9.6 Unlimited Companies
Such types of companies are analogous to that of partnership firm in respect of the liability of a member. Every member in such a company is jointly and severally liable for all the debts and liabilities of the company.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- CG Tax On residential property
- Post Office RD Interest
- Applicable TDS for Purchase of Flat from NRI
- Claiming exemption of perquisite for employee-owned car under New Tax Regime in ITR-2
- Eway bill for machinery reparing
- Gift of mutual fund units to daughter
- ITR 3 FILING OF AN INDIVIDUAL (PARTNER IN A PARTNERSHIP fIRM)
- Annual return of gst limit
- TDS ON CASH WITHDRAWALS...
- Not able to file ITR
- Building tax payment deduction in rental Income
- Foreign inward in ITR
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
- Interest credited in FY2025-2026 & TDS therein by EPFO does not reflect in AIS or Form 26AS
- 44ad eligble money lending interest
- Delisted shares sold in off market/ Rebate u/s87A
- In Exports Sales HSN details where to fill
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- Difference in tax comparison report
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
