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      Question

      Under the Companies Act what is the extent of the

      Members' liability for the company's obligations in a Producer Company limited by shares?
      A The Members have unlimited liability Correct Answer Incorrect Answer
      B The Members are liable up to the face value of their shares Correct Answer Incorrect Answer
      C The Members are liable for all the company's debts and liabilities Correct Answer Incorrect Answer
      D The Members' liability is limited to the amount unpaid on their shares Correct Answer Incorrect Answer
      E Either a or c Correct Answer Incorrect Answer

      Solution

      Section 378C - Formation of Producer Company and its registration: (3) A Producer Company so formed shall have the liability of its Members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them and be termed a company limited by shares.

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