Question

State, whether the following statements is True or False.
The liability of a shareholder of public limited company is limited.

Options

• True

• False

Answer 1

True
Explanation: The liability of a shareholder of a public limited company is limited by shares. That is, the liability is limited to the extent of amount unpaid on their shares. In other words, the private property of shareholders cannot be used to pay off liabilities in the event of winding-up or at the time of liquidation of a company.