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      Question

      What does the term "company limited by guarantee" refer

      to as per the Companies Act?
      A A company where members' liability is limited to the unpaid value of shares they hold Correct Answer Incorrect Answer
      B A company where members' liability is unlimited, and they are responsible for all debts Correct Answer Incorrect Answer
      C A company where the liability of its members is limited by the memorandum to an amount they undertake to contribute to the company's assets in the event of its winding up Correct Answer Incorrect Answer
      D A company where liability is limited to the company's annual profits Correct Answer Incorrect Answer
      E A company where members' liability is limited by shares issued to them Correct Answer Incorrect Answer

      Solution

      Section 2(21) Company limited by guarantee means a company having the liability of its members limited by the memorandum to such amount as the members may respectively undertake to contribute to the assets of the company in the event of its being wound up.

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