Which statements are correct?

(A) A company's shares are generally transferable.

(B) The directors of the company are the owners of the company.

(C) The liability of the members of the company is limited to the extent of shares held by them

(D) Paid up capital can exceed called up capital.

Choose the correct answer from the options given below:

(A) and (C) only

The correct answer is option 2- (A) and (C) only.

(A) A company's shares are generally transferable. IT IS TRUE. The shares of a public limited company are freely transferable. The permission of the company or the consent of any member of the company is not necessary for the transfer of shares. But the Articles of the company can prescribe the manner in which the transfer of shares will be made.

(B) The directors of the company are the owners of the company- IT IS NOT TRUE. In the context of business and finance, equity holders are considered owners of a company. This applies primarily to companies that are structured as corporations, where ownership is represented by shares of stock. Equity holders own shares or equity in the company. Each share represents a certain percentage of ownership in the business. The more shares a person or entity holds, the larger their ownership stake. Directors are not owners of the company.  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.

(C) The liability of the members of the company is limited to the extent of shares held by them. IT IS TRUE.  The liability of the members of the company is limited to the extent of unpaid amount of the shares held by them. In the case of the companies limited by guarantee, the liability of its members is limited to the extent of the guarantee given by them in the event of the company being wound up. 

(D) Paid up capital can exceed called up capital.  IT IS NOT TRUE. Paid up Capital is that portion of the called up capital which has been actually received from the shareholders. When the shareholders have paid all the called amount, the called up capital is the same to the paid up capital. If any of the shareholders has not paid amount on calls, such an amount may be called as ‘calls in arrears’. Therefore, paid up capital is equal to the called-up capital minus call in arrears.

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