Company Accounts

Share Capital

Easy

common

Which of the following is not a feature of a company?

Separate legal entity

Common seal

Limited Liability

Unlimited Liability

✅ Correct Option: 4

A company is a form of business organization that provides certain distinct advantages to its members. Let's examine what are and aren't its features:

Separate Legal Entity: A company has its own legal identity, separate from its owners (shareholders). It can own property, enter contracts, and sue or be sued in its own name.

Common Seal: A company has a common seal which acts as its official signature. It is used to authenticate important documents (though now optional under the Companies Act, 2013).

Limited Liability: The shareholders' liability is limited to the amount unpaid on their shares. Their personal assets cannot be used to pay company debts. This is a fundamental feature of a company.

Unlimited Liability: This means owners are personally liable for all business debts without any limit. This is a characteristic of sole proprietorships and partnership firms (for general partners), not companies.

The very purpose of forming a company is to enjoy limited liability protection. If a company had unlimited liability, it would defeat the primary advantage of choosing this form of organization. Creditors can only claim from the company's assets, not from shareholders' personal wealth (except in cases of fraud or lifting of corporate veil).

Therefore, Unlimited Liability is not a feature of a company.

2025: 15 May Shift 1

The important steps in the procedure of share issue are :

(A) The company issues the prospectus to the public.

(B) The company has to get minimum subscription within 120 days from the date of the issue of the prospectus.

(C) The prospective investors intending to subscribe the share capital of the company would make an application along with the application money.

(D) Letters of allotment are sent to those whom the shares have been alloted, and letters of regret to those to whom no allotment has been made.

Choose the correct sequence of steps from the options given below:

2023: 29 May Shift 2

Identify the account to which the discount allowed on reissue of forfeited shares should be debited.

2025: 24 May Shift 1

The amount of Securities Premium can be used only for the following purposes:

(A) To write off preliminary expenses.

(B) To make partly paid shares as fully paid up.

(D) Purchase of its own shares.

Choose the correct answer from the options given below:

2023: 29 May Shift 2

Identify the number of shares with which A ltd is registered.

2026: 11 May Shift 1

Match the LIST-I with LIST-II

	LIST-I (Classification of Share Capital)		LIST-II (Categories of Share Capital)
A.	The authorised capital which is not offered for public subscription and it may be offered for public subscription at a later date.	I.	Issued Capital
B.	A company may reserve a portion of its uncalled capital to be called only in the event of winding up of the company.	II.	Paid up Capital
C.	It is that part of the authorised capital which is actually issued to the public for subscription including the shares allotted to vendors and the signatories to the company's memorandum.	III.	Reserve Capital
D.	It is that portion of the called up capital which has been actually received from the shareholders.	IV.	Unissued capital

Choose the correct answer from the options given below:

2025: 15 May Shift 1

The director of Priya polymer Limited resolved that 200 equity shares of Rs. 100 each be forfeited for non-payment of the second and final call of Rs. 30 per share. Out of these, 150 shares were re-issued at Rs. 60 per share to Monit. The amount of capital reserve will be:

Which of the following is not a feature of a company?

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