TYPES OF COMPANY – LIABILITY

BASED

LIMITED BY LIMITED BY UNLIMITED

SHARES
The liability of its GUARANTEE
Liability of its members LIABILITY
No limit on liability of
members are limited to limited by the amount of members.
the amount, if any, unpaid guarantee taken by the
on the shares held by members.
them.
LIMITED BY SHARES

10K shares bought

Reason: bought 10k shares
and had paid 4k. The
Paid 4k liability only remains 6k for
him to pay.
Now the company is winding up
Only 6k will be paid
Member
LIMITED BY GUARANTEE

Guarantees 5k
Reason: he had
guaranteed 5k amount
before and therefore is
limited to pay that amount.
Now the company is winding up
Only 5k will be paid
Member
UNLIMITED LIABILITY

5K shares bought
Reason: since the company
was on unlimited liability
Paid 5k nature, the member had to
Company liability is of unlimited nature pay any amount the
company required to pay
its creditors. That also may
include selling his house.
Member

Now the company is winding up

Unlimited liability until all
amount is paid.