i. Can the company ask Mr. John to pay any further money to the company? ii. Which feature of a Joint Stock company is referred to in this example?

Monjur Alahi

Study the following case and express your opinion:

On 1st January 2018 Mr. John bought 100 shares of TIPS Paints Ltd. The face value of each share was ₹ 10. Mr. John paid the full amount of ₹ 1,000. In December 2018 the company suffered a loss of ₹ 10 crores.

i. Can the company ask Mr. John to pay any further money to the company?

ii. Which feature of a Joint Stock company is referred to in this example?

iii. Explain the feature briefly.


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Salim Ahmed Kawsar

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i. No, Company cannot ask Mr. John for further payment, because, he has already paid the full amount of face value.

ii. ‘Limited Liability is a feature, which is referred to in this example.

iii. As per ‘Limited liability’ member of the company is not liable to debts of the company. Member is liable only up to the unpaid amount of share capital. Members’ personal property will not be used for the liability of a company.

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