O-LevelAccountingThe fundamentals of accounting7707/12 · Oct/Nov 2022 · Q201 Mark

Members of a limited company have limited liability for the debts of that company. What does this mean?

AMembers are equally liable for the debts of the company.

BMembers are liable only up to the value of their personal assets.

CMembers are liable only up to the amount they agree to pay for their shares in the company.

DMembers are liable only up to the value of the debentures they hold in the company.

✓ Correct answer

C: Members are liable only up to the amount they agree to pay for their shares in the company.

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Topic: The fundamentals of accounting, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, Oct/Nov 2022 Paper 1 Variant 2, question 20.

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Members of a limited company have limited liability for the debts of that company. What does this mean?

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