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company limited by shares

Priyanka Gupta (Articl tranee) (232 Points)

15 August 2009

When thae liability of the members of a company is limited by its memeorandum of association to the amount (if any) unpaid on shares held by them, , it is known as a company limited by shares

,Please tell me simple words........

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5 Replies

S.R.SRIDHAR (ACCOUNTANT) (746 Points)
Replied 15 August 2009

The liability of each member of such company is limited to the unpaid amount of shares and premium, if any, held by him.

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GIRISH AGARWAL (C.A Final Student) (91 Points)
Replied 15 August 2009

NO. A CO. LIMITED BY SHARES IS A CO. THAT CANNOT ISSUE MORE SHRES THAN DESCRIBED IN MOA.

UNPAID AMT ON SHARES IS A DIFFERENT MATTER

Shubham (Mangement Trainee) (24 Points)
Replied 05 September 2009

"company limited by shares" means at the time of winding up of the company, a member can only be asked to pay according to nominal value or the unpaid call amount of the share.

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 05 September 2009

For More details read my Article at the below mentioned link:

BASIC UNDERSTANDING ABOUT COMPANIES

Companies limited by shares

These types of companies are quite common in commercial, trading and industrial world. Such companies are characterised with an authorised share capital of a certain amount, which is divided into shares. The authorised share capital may comprise of more than one kind of shares, viz. ordinary or equity shares (voting and non-voting) and preference shares. The liability of each member of such company is limited to the unpaid amount of shares and premium, if any, held by him.

Nitin (student) (24 Points)
Replied 02 December 2015

Example If you have 1 share of rs. 100, and you paid for it only rs. 80 (say) till date, then the company may asked you for rs. 20 (which would be your liability limited to rs. 20 on share) only, when they need it, not more than that.