Cost Accounting - what is limited liability clause

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what is limited liability clause

Total Answers and Comments: 3

Last Update: June 22, 2008 Asked by: created4u

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Submitted by: umairahmedpk

Limited liability caluse is mentioned in memorendum of association. Under this clause, it is mentioned that the liability of the members of the company i.e share holders have liability upto their amount payable for the shares outstanding.

This means that every member is liable to the extent of the amount payable against the shares held by him.

Eg. If the purchases the Rs.10 partly paid shares at Rs. 4. Then at the liquidation of the company or when ever company calls for the remaining amount i.e Rs.6 to pay, the holder is liable to pay only Rs.6. The holder will not contribute any further amount even in case of deficiency of funds at the time of liquidation.

Above answer was rated as good by the following members:
Anjali_17

June 12, 2008 02:30:05

kant sharma

Member Since: June 2008 Contribution: 1

RE: what is limited liability clause

limited liabilities

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June 12, 2008 07:11:08

umairahmedpk

Member Since: June 2008 Contribution: 2

RE: what is limited liability clause

Limited liability caluse is mentioned in memorendum of association. Under this clause it is mentioned that the liability of the members of the company i.e share holders have liability upto their amount payable for the shares outstanding.

This means that every member is liable to the extent of the amount payable against the shares held by him.

Eg. If the purchases the Rs.10 partly paid shares at Rs. 4. Then at the liquidation of the company or when ever company calls for the remaining amount i.e Rs.6 to pay the holder is liable to pay only Rs.6. The holder will not contribute any further amount even in case of deficiency of funds at the time of liquidation.

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June 22, 2008 23:30:06

ahmedali

Member Since: June 2008 Contribution: 2

RE: what is limited liability clause

what is limited liability clause complet detailes of this question

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