Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Shares

Question:

Which of the following companies are not found in India even though permitted by the Companies act?

Options:

Companies Limited by shares

Companies Limited by guarantee

Unlimited companies

None of these

Correct Answer:

Unlimited companies

Explanation:

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.