Which of the following statements is not true for a 'no-liability' company?
A) If the company becomes insolvent shareholders are still required to pay any outstanding amounts owed on their shares.
B) In Australia, no-liability companies are solely mining companies.
C) The shareholders are not liable for the outstanding debts of the company.
D) The company's operations are of a risky nature.

Question

Quizplus · Accepted Answer

A 'no-liability' company means that shareholders are not personally liable for the company's debts beyond the amount that they have invested in the company. Therefore, statement A is not true as shareholders would not be required to pay any outstanding amounts owed on their shares if the company becomes insolvent. Statements B, C, and D are true for a 'no-liability' company.

Which of the Following Statements Is Not True for a 'No-Liability