Identify the correct statements from the following.
(A) Share application account is a personal account.
(B) Every member of a company is entitled to take part in its management.
(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:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → (A) and (C) only
(A) Share application account is a personal account. – Correct. It stands for the applicants, to whom money may have to be refunded.
(B) Every member of a company is entitled to take part in its management. – Incorrect. The company is managed by its Board of Directors, not by every shareholder.
(C) A company is an artificial person. – Correct. It is created by law and has a separate legal entity.
(D) Shareholders of a company are liable for the acts of the company. – Incorrect. The company is a separate entity and the shareholders' liability is limited.
(E) The part of capital which is called up only on winding up is called Capital Reserve. – Incorrect. That part is Reserve Capital; a capital reserve is created out of capital profits.
NCERT (2026-27 edition):
NCERT (2026-27 edition):
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