It has unlimited liability
It exists only in contemplation of law
It has not a perpetual succession
It comes to an end on the death of all its members
Answer is Right!
Answer is Wrong!
The correct answer is: B. It exists only in contemplation of law.
A company is an artificial person created by law. It is a legal entity that is separate from its members. This means that the company can own property, enter into contracts, and sue and be sued in its own name. The company’s members are not personally liable for the company’s debts.
A company is said to exist only in contemplation of law because it is a creature of the law. It does not exist independently of the law. The law creates the company and gives it its powers and privileges. The law also regulates the company’s activities and provides for its dissolution.
The other options are incorrect because:
- A company does not have unlimited liability. The liability of a company’s members is limited to the amount of their investment in the company.
- A company does have a perpetual succession. This means that the company continues to exist even if its members change.
- A company does not come to an end on the death of all its members. The company can continue to exist even if all of its members die.