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Consider the following statements regarding company limited by guarantee.
- A company limited by guarantee is one in which, if the company goes bankrupt, those running it only have to pay a sum they had guaranteed to pay when it was set up.
- Such a company has no shareholders, but is owned by a group of people called members or guarantors.
- Usually, this structure is put in place for charitable organisations and non-profits.
Which of the above statements is/are correct?
- a)1, 2
- b)1, 3
- c)2, 3
- d)1, 2, 3
Correct answer is option 'D'. Can you explain this answer?
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Most Upvoted Answer
Consider the following statements regarding company limited by guarant...
Statement 1: A company limited by guarantee is one in which, if the company goes bankrupt, those running it only have to pay a sum they had guaranteed to pay when it was set up.
This statement is correct. In a company limited by guarantee, the members or guarantors agree to pay a predetermined amount if the company becomes insolvent or goes bankrupt. This predetermined amount is the guarantee they provided when the company was established. The liability of the members is limited to this guaranteed amount, and they are not personally liable for the company's debts beyond their guarantee.
Statement 2: Such a company has no shareholders, but is owned by a group of people called members or guarantors.
This statement is correct. In a company limited by guarantee, there are no shareholders as in a typical company. Instead, the ownership of the company lies with the members or guarantors. These members or guarantors are usually individuals or other entities that have a common interest in the company's objectives. They may include individuals, other organizations, or even government bodies.
Statement 3: Usually, this structure is put in place for charitable organizations and non-profits.
This statement is correct. Companies limited by guarantee are commonly used for charitable organizations and non-profit entities. The structure of a company limited by guarantee ensures that the organization's assets are protected and the liability of the members is limited. This structure is particularly suitable for non-profit organizations as it allows them to focus on their charitable activities without the burden of personal liability for the company's debts.
Conclusion:
All three statements are correct. A company limited by guarantee is a type of company in which the members or guarantors agree to pay a predetermined amount if the company goes bankrupt. This structure is commonly used for charitable organizations and non-profits, and it does not have shareholders but is owned by the members or guarantors.
This statement is correct. In a company limited by guarantee, the members or guarantors agree to pay a predetermined amount if the company becomes insolvent or goes bankrupt. This predetermined amount is the guarantee they provided when the company was established. The liability of the members is limited to this guaranteed amount, and they are not personally liable for the company's debts beyond their guarantee.
Statement 2: Such a company has no shareholders, but is owned by a group of people called members or guarantors.
This statement is correct. In a company limited by guarantee, there are no shareholders as in a typical company. Instead, the ownership of the company lies with the members or guarantors. These members or guarantors are usually individuals or other entities that have a common interest in the company's objectives. They may include individuals, other organizations, or even government bodies.
Statement 3: Usually, this structure is put in place for charitable organizations and non-profits.
This statement is correct. Companies limited by guarantee are commonly used for charitable organizations and non-profit entities. The structure of a company limited by guarantee ensures that the organization's assets are protected and the liability of the members is limited. This structure is particularly suitable for non-profit organizations as it allows them to focus on their charitable activities without the burden of personal liability for the company's debts.
Conclusion:
All three statements are correct. A company limited by guarantee is a type of company in which the members or guarantors agree to pay a predetermined amount if the company goes bankrupt. This structure is commonly used for charitable organizations and non-profits, and it does not have shareholders but is owned by the members or guarantors.
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Consider the following statements regarding company limited by guarant...
What is a company limited by guarantee?
A company limited by guarantee is one in which, if the company goes bankrupt, those running it only have to pay a sum they had guaranteed to pay when it was set up.
The Companies Act, 2013, says, “Company limited by guarantee means a company having the liability of its members limited by the memorandum to such amount as the members may respectively undertake to contribute to the assets of the company in the event of its being wound up.”
Put very simply, such a company has no shareholders, but is owned by a group of people called members or guarantors. When coming together to form the company, these members pledge to pay a certain amount — usually not a large amount — in case it is wound up. Their liability, if the company fails, is limited to this amount.
Usually, this structure is put in place for charitable organisations and non-profits, where any profit earned by the company is re-invested into the business. The members or guarantors can seek donations and funds in the name of the company, but if it fails, they are shielded from the debts it may have accrued.
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Consider the following statements regarding company limited by guarantee. A company limited by guarantee is one in which, if the company goes bankrupt, those running it only have to pay a sum they had guaranteed to pay when it was set up. Such a company has no shareholders, but is owned by a group of people called members or guarantors. Usually, this structure is put in place for charitable organisations and non-profits.Which of the above statements is/are correct?a)1, 2b)1, 3c)2, 3d)1, 2, 3Correct answer is option 'D'. Can you explain this answer?
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Consider the following statements regarding company limited by guarantee. A company limited by guarantee is one in which, if the company goes bankrupt, those running it only have to pay a sum they had guaranteed to pay when it was set up. Such a company has no shareholders, but is owned by a group of people called members or guarantors. Usually, this structure is put in place for charitable organisations and non-profits.Which of the above statements is/are correct?a)1, 2b)1, 3c)2, 3d)1, 2, 3Correct answer is option 'D'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding company limited by guarantee. A company limited by guarantee is one in which, if the company goes bankrupt, those running it only have to pay a sum they had guaranteed to pay when it was set up. Such a company has no shareholders, but is owned by a group of people called members or guarantors. Usually, this structure is put in place for charitable organisations and non-profits.Which of the above statements is/are correct?a)1, 2b)1, 3c)2, 3d)1, 2, 3Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding company limited by guarantee. A company limited by guarantee is one in which, if the company goes bankrupt, those running it only have to pay a sum they had guaranteed to pay when it was set up. Such a company has no shareholders, but is owned by a group of people called members or guarantors. Usually, this structure is put in place for charitable organisations and non-profits.Which of the above statements is/are correct?a)1, 2b)1, 3c)2, 3d)1, 2, 3Correct answer is option 'D'. Can you explain this answer?.
Consider the following statements regarding company limited by guarantee. A company limited by guarantee is one in which, if the company goes bankrupt, those running it only have to pay a sum they had guaranteed to pay when it was set up. Such a company has no shareholders, but is owned by a group of people called members or guarantors. Usually, this structure is put in place for charitable organisations and non-profits.Which of the above statements is/are correct?a)1, 2b)1, 3c)2, 3d)1, 2, 3Correct answer is option 'D'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding company limited by guarantee. A company limited by guarantee is one in which, if the company goes bankrupt, those running it only have to pay a sum they had guaranteed to pay when it was set up. Such a company has no shareholders, but is owned by a group of people called members or guarantors. Usually, this structure is put in place for charitable organisations and non-profits.Which of the above statements is/are correct?a)1, 2b)1, 3c)2, 3d)1, 2, 3Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding company limited by guarantee. A company limited by guarantee is one in which, if the company goes bankrupt, those running it only have to pay a sum they had guaranteed to pay when it was set up. Such a company has no shareholders, but is owned by a group of people called members or guarantors. Usually, this structure is put in place for charitable organisations and non-profits.Which of the above statements is/are correct?a)1, 2b)1, 3c)2, 3d)1, 2, 3Correct answer is option 'D'. Can you explain this answer?.
Solutions for Consider the following statements regarding company limited by guarantee. A company limited by guarantee is one in which, if the company goes bankrupt, those running it only have to pay a sum they had guaranteed to pay when it was set up. Such a company has no shareholders, but is owned by a group of people called members or guarantors. Usually, this structure is put in place for charitable organisations and non-profits.Which of the above statements is/are correct?a)1, 2b)1, 3c)2, 3d)1, 2, 3Correct answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for UPSC.
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ample number of questions to practice Consider the following statements regarding company limited by guarantee. A company limited by guarantee is one in which, if the company goes bankrupt, those running it only have to pay a sum they had guaranteed to pay when it was set up. Such a company has no shareholders, but is owned by a group of people called members or guarantors. Usually, this structure is put in place for charitable organisations and non-profits.Which of the above statements is/are correct?a)1, 2b)1, 3c)2, 3d)1, 2, 3Correct answer is option 'D'. Can you explain this answer? tests, examples and also practice UPSC tests.
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