Incorporation of pvt co.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 September 2012 I m incorporating pvt co. there is option of co. with limited by shares or co with unlimited shares. can u tell me the difference in between

Guest

Guest (Expert)

06 September 2012 A company can be a limited or unlimited. Limited liability company is one which limits the liability of the members(shareholders) by (1) limited by shares or (2) limited by guarantee.

Therefore Company limited by guarantee is a type of limited company which means the liability of the members' is limited by the guarantee given by them while becoming the member. The members have agreed to be liable to the company at the time of liquidation of the company upto an amount for which he is liable and does not have any other liability.

Limited by shares means the member (shareholder) is liable for the value of the shares only.

Members of the company with unlimited liability has unlimited liability for which they are liable even from their personal property if required.