Identify the correct statements from the following.

(A) Share application account is a personal account
(B) Director of a company must be a shareholder.
(C) A company is an artificial person
(D) Shareholders of a company are liable for the acts of the company.
(E) The part of capital which is called up only on winding up is called Capital Reserve.

Choose the correct answer from the options given below:

(A), (B), (C) and (D) only

The correct answer is Option 2 - (A), (B) (C) and (D) only.

(A) Share application account is a personal account. This is true. Share Application or share allotment or Share capital A/c all are personal accounts as they represent money from the shareholders and when money is due, these are to be debited because of the rule "Debit the receiver".

(B) Director of a company must be a shareholder. This is true. Some shares should be allotted to directors also.

(C) A company is an artificial person- This is true. The company being an artificial person created by law continues to exist irrespective of the changes in its membership. A company can be terminated only through law. The death or insanity or insolvency of any member of the company in no way affects the existence of the company. Members may come and go but the company continues.

(D) Shareholders of a company are liable for the acts of the company. This is true. The shareholders are the real owners of the company. Whether the company is run by directors of the company but shareholders are liable to acts of the company.

(E) The part of capital which is called up only on winding up is called Capital Reserve. This is false. A company may set aside a portion of its uncalled capital, which would only be called upon in the event of the company's liquidation or winding up. This uncalled amount is referred to as the company's 'Reserve Capital' and is exclusively reserved for the satisfaction of creditors during the liquidation process.