MGT401 GDB Solution Fall Oct 2012Professionals’ Group Associates (PGA) – a professional promoter has recently conducted a test for its yearly
recruitment. In the test, one of the questions was about the name of a prime document providing the status of the “members’ liability” in any company working in Pakistan. This document along with other documents is required for the registration of a
joint stock company in Pakistan.
You are required to:- Mention the name of the document carrying the status of “members’ liability”;
- Briefly describe the true meaning of “member’s liability”; &
- How a company can be recognized as a limited liability company through its name?
Solution:
1:The document carrying the status of "members liability " is Memorandum .It is the basic document and the business of the company is carried out within the limits defined by this document .
2: Member's Liability is classify in two parts.
1=Limited liability: The shareholders are only liable for the company's debts to the value of money they invested in the company.
2=UN limited liability: if the company fails, files for bankruptcy and you owe debts; then your personal assets can be seized such as your home, car, contents of your bank accounts to pay off the debts.
3: If company is joint stock company , which in my jurisdiction would mean that it is limited by shares and shareholders have limited liability, you would recognize it if the legal or full name of the company was followed by words such as 'limited', "ltd.", or "Inc.
