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IAI Actuarial Core Principles · Business Management · Separate legal personality, directors' duties, shareholders and partnerships

A charitable actuarial research society wants to be incorporated under the Companies Act, 2013 with no share capital, with members promising to contribute a fixed amount towards its assets only if it is wound up. Which type of company does this describe?

This describes a company limited by guarantee. Its members undertake to contribute a fixed sum to its assets only on winding up, and it may have no share capital. Companies limited by shares, unlimited companies, one person companies and government companies are defined differently.

  1. AA company limited by guaranteeCorrect
  2. BA company limited by shares
  3. CAn unlimited company
  4. DA one person company
  5. A government company

Explanation

In a company limited by guarantee, members undertake to contribute a stated amount to its assets on winding up, and it commonly has no share capital. A company limited by shares limits liability to unpaid share amounts. An unlimited company has no cap on liability. A one person company has a single member.

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