Week 11 - Limited Companies Flashcards
1
Q
Define a limited company in regards to a member’s liability
A
Limited company: Members’ liability is then limited to the sum which they have agreed to invest
2
Q
What happens if the company gets into trouble?
A
The company has to pay the debts, BUT the shareholders are not personally liable (apart from paying what they are still owing on their shares)
3
Q
Why are companies limited by guarantee not a suitable form of organisation to use for a trading company?
A
They have very limited capital
4
Q
What are companies limited by guarantee usually associated with?
A
Charities, trade associations and not-for-profit ventures
