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True/False Answer Question: If a company suffers heavy issues and its assets are not enough to pay off its liabilities, the balance can be recovered from the private assets of its members.

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Question

True/False Answer Question:

If a company suffers heavy issues and its assets are not enough to pay off its liabilities, the balance can be recovered from the private assets of its members.

Options

  • True

  • False

MCQ
True or False
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Solution

The statement is FALSE.

In view of the limited liability of the members and shareholders of a company, they are not liable to pay any amount from their private assets if the company suffers any loss or is liquidated.

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Formation of a Company
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Chapter 7: Formation of a Company - True or False [Page 180]

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NCERT Business Studies [English] Class 11
Chapter 7 Formation of a Company
True or False | Q 9 | Page 180

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