Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Accounting for Shares

Question:

The liability of members of a company limited by a guarantee is limited to.............................

Options:

Unpaid value of shares

Guaranteed Amount

Unlimited Liability

None of these

Correct Answer:

Guaranteed Amount

Explanation:

The correct answer is option 2- Guaranteed Amount.

The liability of members of a company limited by a guarantee is limited to Guaranteed Amount.

Companies Limited by Guarantee: In this case, the liability of its members is limited to the amount they undertake to contribute in the event of the company being wound up. Thus, the liability of the members will arise only in the event of its winding up.