Explain the following concept: Liability Clause
Explain the following concept:
Liability Clause
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- This clause defines the liability of the members of the company.
- In the case of companies limited by shares, the liability of the members is limited to the extent of unpaid shares.
- In the case of a company limited by guarantee, the liability is limited to the amount of guarantee given by each member.
- In the case of an unlimited liability company with or without share capital, this clause states that the liability of its members is unlimited.
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