Commercial Applications
Statement I : A company is a creation of the law and only the law can bring an end to its existence.
Statement II : The life of a company does depend on the life of its members.
- Only I is correct
- Only II is correct
- Both I and II are correct
- Both I and II are wrong
Answer
Only I is correct
Reason — Statement I is correct because a company is created by law and only the law can bring an end to its existence through the process of winding up. Statement II is wrong because the life of a company does not depend on the life of its members. The death, insolvency or lunacy of members does not affect the life of the company. Members may come and go but the company goes on until it is wound up. This feature is known as perpetual succession.
Related Questions
Statement I : A joint stock company is an association of persons having a separate legal existence, perpetual succession and common seal.
Statement II : Mass production does not require huge capital investment and expert professional management.
- I is only correct
- II is only correct
- Both I and II are correct
- Both I and II are wrong
Which of the following statements is wrong?
- A company has a distinct legal entity independent of its members.
- Shareholders are the joint owners of the company's property.
- A company can own property, make contracts and file suits in its own name.
- There can be contracts between a company and its members but a creditor of the company is not a creditor of its members.
Which of the following statements is correct?
- The death of members affect the life of a company
- Members may come and go but the company goes on until it is wound up.
- The members of a company can be held liable for the debts of the company.
- Shareholders are the joint owners of the company's property.
The features of a joint stock company are :
- Separate legal existence
- Limited liability
- Perpetual succession
- All of these