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WAEC Commerce 2003 Question 5

Question 5

Business Units

When a public company receives the certificate of incorporation, this implies that

  1. A.it can go ahead and start business
  2. B.it can no longer sue or be sued
  3. C.the company finds it difficult to raise capital
  4. D.the company's assets exist separately from those of its members
Show the answer and explanation

Answer: D (the company's assets exist separately from those of its members)

Explanation

Incorporation makes the company a separate legal person whose assets are separate from its members'; a public company still needs a certificate of trading to start business.