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The word ''limited"  written after the name of a company means that  

Commerce
WAEC 2021

The word ''limited"  written after the name of a company means that  

  • A. it has a democratic system of management
  • B. members are liable to the extent of their shareholdings only
  • C. the company is a going concern
  • D. profit is determined by management
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Correct Answer: Option B
Explanation

This means that in the event that the company folds up and its assets are liquidated, the liabilities of the company are only limited to the invested amount or the assets of the company.

Simply put, if a company folds up, the private properties or assets of the owners of the company cannot be used to settle investors (debts). Only business assets can be used to settle the legal obligations of the company to shareholders or investors as the case may be.


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WAEC May/June 2024 - Practice for Objective & Theory - From 1988 till date, download app now - 99995
WAEC offline past questions - with all answers and explanations in one app - Download for free
WAEC Past Questions, Objective & Theory, Study 100% offline, Download app now - 24709
WAEC May/June 2024 - Practice for Objective & Theory - From 1988 till date, download app now - 99995
WAEC Past Questions, Objective & Theory, Study 100% offline, Download app now - 24709
WAEC offline past questions - with all answers and explanations in one app - Download for free