In an unlimited company, how can creditors claim their dues if the company's property is insufficient?
Answer & explanation
Correct answer: option 2
The correct answer is option 2- From the private property of its members.
In an unlimited company, creditors can claim their dues from the private property of its members, if the company's property is insufficient.
When there is no limit on the liability of its members, the company is called an unlimited company. When the company’s property is not sufficient to pay off its debts, the private property of its members can be used for the purpose. In other words, the creditors can claim their dues from its members. Such companies are not found in India even though permitted by the Companies Act.