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JAMB Commerce 1995 Question 8

Question 8

Business Units

One of the implications of the incorporation of a company is that

  1. A.it is more difficult for the company to raise loans
  2. B.the company can sue but cannot be sued
  3. C.the company's property becomes distinguished from that of its members
  4. D.its members become liable for all the debts of the company.
Show the answer and explanation

Answer: C (the company's property becomes distinguished from that of its members)

Explanation

Incorporation makes the company a separate legal person, so its property is separate from its members' property.