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Which of the following is not a characteristic of a company?a) Perpetual successionb) Common sealc) Unlimited liabilityd) Transferability of shares

Question

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Solution

To determine which of the options is not a characteristic of a company, let's analyze each of the given choices:

  1. Perpetual succession: This is a characteristic of a company, meaning that the company continues to exist even if the ownership changes or if members leave.

  2. Common seal: A common seal is used by companies to execute documents; it is a characteristic of many companies, especially in certain legal jurisdictions.

  3. Unlimited liability: This is not a characteristic of a company. In a company, liability is typically limited to the amount unpaid on shares held by shareholders (limited liability).

  4. Transferability of shares: This is a characteristic of a company, allowing shareholders to sell or transfer their shares to others easily.

Final Answer

The option that is not a characteristic of a company is c) Unlimited liability.

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