Which statements are correct? (A) A company's shares are generally tr…

The correct answer is Option (2) → (A) and (C) only

A company is an artificial person with a legal existence of its own, separate from its members; the statements turn on this.

(A) A company’s shares are generally transferable. Correct. Shares of a company can generally be transferred from one person to another.

(B) Shareholders of a company are liable for the acts of the company. Incorrect. The company is a separate legal entity, so it alone is liable for its acts; a shareholder’s risk is limited to the amount unpaid on his shares.

(C) A company is an artificial person. Correct. It is created by law and acts through its directors, but it can own property, enter into contracts and sue or be sued in its own name.

(D) Paid up capital can exceed called up capital. Incorrect. Paid up capital is the part of the called up capital actually received, so at most it equals the called up capital.

Note: NTA dropped this question. For the benefit of students and to give them additional practice, the question has been suitably modified so that it has one clear answer.