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The best way to dene limited liability is: one where the liability of its members is not limited bythe articles to the amount if anyr unpaid on the shares respectively held by them but one where the liability of the members is limited by its articles to such amount as the members undertake to contribute to the assets of the company in the event of its being wound up one where the liability of its members is limited by the articles to the amount, if any. unpaid on the shares respectively held by them but one where the liability ofthe members is not limited by its articles to such amount as the members undertake to contribute to the assets of the company in the event of its being wound up. one where the liability of its members is not limited bythe articles to the amount if anyr unpaid on the shares respectively held by them and one where the liability of the members is not limited by its articles to such amount as the members undertake to contribute to the assets of the company in the event of its being wound up. one where the liability of its members is limited by the articles to the amount, if any. unpaid on the shares respectively held by them and one where the liability of the members is limited by its articles to such amount as the members undertake to contribute to the assets of the company in the event of its being wound up It is said that legislation of Company Law started in 1844 with The Joint Stock Companies Act of 1844. This Act: O a. Provided the members with limited liability b. Initiated legislation of a company without obtaining a royal charter or sanction by a special Act of Parliament. C Stated that a company could operate only by a royal charter O d. Introduced the Memorandum and Articles of AssociationJane, Jill and Mary are partners in the rm; Sweet Treats. They decided to incorporate the business as a private company and invited their family and friends to become shareholders. In total. there were 18 shareholders. The company has been doing well and 4 employees of the company wanted to buy shares in the company. Jane stated that they can only allow 2 employees to buy shares because the limit for the private company under the Companies Act 2004 is 2G. Jill and Mary are disappointed because they wanted the other 2 employees to get the opportunity to own shares in the company. I|ll'll'hat would be your best advice to them? Q a. They can go ahead and allow all 4 to be shareholders because the Companies Act 2W4 will allow more than 26 in these circumstances 0 b. They should open up a public company so that they can have more than 20 shareholders C} c. Theyjust haye to abide by the rules and allow only 2 employees to buy shares 0 d. They should ask the employees to pair up so that 2 will be as one Does the existence of corporate personality automatically mean there is limited liability? C1 a. No] because companies were not granted limited liability O b. No] a company can have legal personality without limited liability because the law allows a company to be registered as an unlimited company 0 c. 'r'es, because partnerships and sole traders do not have limited liability D d. Yes, because all companies are set up that way The two basic systems of legal classication of companies under The Companies Act. 2W4 are: C:- a. Companies that are listed on the Stock Exchange and companies that are listed on the Junior Stock Exchange 0 b. Companies that are a public or private and companies with limited liability or unlimited liabilityr O c. Companies that are government owned and companies that are owned by private individuals 0 d. Companies that are involved in manufacturing and companies that are involved in distributing The concept of separate legal personality can be a 'twoedged' sword. Which of the following statements best explains this? Ca. Oc. Even though a shareholder can have the protection of limited liability; if the company's becomes insolventr a shareholder would in all cases have to sell his personal assets to pay the debts of the company benets. This would not be effective if the company does not adopt the contract Even though a shareholder has separate legal personality from a company, if the company is sued for breach of contract the shareholder would have to pay damages awarded by the court. Even though a shareholder has separate legal personality from a company; if the company's assets were destroyed. by fire. a shareholder would still be able to claim on the insurance if he owned all the shares in the company Even though a shareholder can have the protection of limited liability, if the company's assets were destroyed] by re] a shareholder would be prevented from claiming on the insurance since he would not have an insurable interest in the assets even if he owned all the shares in the company Mr. John Binden was the sole shareholder and director at Breezes Sanitizing Ltd. While John was at work, he was heading to a meeting in the board room and he slipped and fell because there was some water left on the floor by a cleaner employed by Breezes. The company had taken out an Employers' Liability insurance to cover the company's liability to its employees for bodily injury and so John made a claim on the policy. The insurance company is refusing to honor the claim by saying that John is a director and shareholder of the company and therefore could no way be seen as an employee. John comes to you for advice. Using case law which of the following would be the best advice to John? a. John is not likely to be compensated under the insurance policy because the court would lift the veil due to fraud, as seen in Gilford Motor Co. Led v Horne (1933) O b. John is likely to be compensated under the insurance policy because the company and John were distinct legal entities and therefore capable of entering into legal relations with each other, as seen in Lee v Lee's Air Farming (1961) O c. John is likely to be compensated under the insurance policy because he does have an insurable interest in the company's assets as seen in the case of Macaura v Northern Assurance Co. (1925) O d. John is not likely to be compensated under the insurance policy because he does not have an insurable interest in the company's assets as seen in the case of Macaura v Northern Assurance Co. (1925)The doctrine of ultra yires stipulates that a company has the legal capacity to carryr out only such acts or perform transactions that are expressed or within reasonably authorization by the company's objects clause in the memorandum of association. This doctrine has been effectively diminished by the following: 0 a. Companies Act 21304 O b. Ashbury Railway Conioge and iron Co. v Richie [18?5j ii? Hi 653 O c. The Joint Stock Companies Act of 1344 Q d. Soiomon vSoiomon 8! Co. (TBS?) Which one the following would NOT be considered a benefit of incorporation to the businessman? a. Constant disclosure to Companies Office of Jamaica b. Means of spreading income amongst the members of a family O . The opportunity for limited liability d. Increased borrowing powers by way of a floating chargeThe Articles of Incorporation is an 'unusual contract' because: 0 a. It does not have the element of consideration 0 b. There is no offer or acceptance 0 c. It is made between two or more people 0 cl. It can be 1trarietl without the consent of all the parties to it