What does the term “Limited Liability” mean?

What does the term “Limited Liability” mean?

December 25, 2019

At incorporation, it is required that every company be registered either as a private company or public company. Where a company is registered as a private company Limited by shares, the members of the company are required to take what is known as shares. This represents their value in the company or the asset in which they have in the company. A member of a company can be called a shareholder or a subscriber because he has a share in the company. However, the shares are Limited to the amount in which they subscribed to.

Accordingly, the term “Limited Liability” in Section 21(1a) of the Companies and Allied Matters Act(CAMA) as a company having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them. What this entails is that the Liability which is the shares subscribed to by the members  of the company is limited to the extent in which they subscribe in the event of liquidation or winding up if any of the shares is unpaid.

The subscription of shares in a limited liability company during incorporation does not necessarily mean that the subscribers are to bring the exact value in monetary sum, but simply means what the subscriber intends to contribute as his value in the company. This can be unpaid during the course of operation of the business but the subscriber would be required to contribute same should the company be wound up or Liquidated.

 

 

 

The information in this blog post (“post”) is provided for general informational purposes only, no information contained in this post should be construed as legal advice, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through this post without seeking the appropriate legal or professional advice from the particular facts and circumstances at issue from a lawyer. This post is protected by intellectual property law and regulations. It may however be shared using appropriate sharing tools provided that our authorship is always acknowledged and this Disclaimer Notice attached.

More Articles

Search

Connect With Us

Got any questions?

If you are having any questions, please feel free to ask.

Send us an email

Frequently Asked

  • When are Annual Returns due for filing?

    A company’s first Annual Returns are due for filing after 18 months of its inception, subsequently it should be filed annually as the name implies. The filing dates could differ for each company depending on their financial year end but must be filed not later than 42 days after its Annual General Meeting.

    The Annual Returns for Business Names is due not later than the 30th of June each year except in the year the business was registered.
  • Must my Company Secretary be a Lawyer?

    Although it’s ideal to have a lawyer as a company secretary, it is not compulsory for small private businesses.
  • Why is mutual assent important in a contract?

    This is one of the key elements of a contract because is shows the meeting of the minds of both parties
  • What are the product categories available when registering with NAFDAC?

    The product categories include: Food, Cosmetics, Drug, Medical Device, Agro-Chemicals & Pesticide, Veterinary Products, Vaccines & Biologicals, Herbal and Nutraceuticals and Water
  • Is it legal to transfer the personal data you obtained legally to another person?

    No, its not legal. This is because the law prohibits anyone from transferring the data of a third party to another person without consent from the third party to do same even if the data was rightfully obtained in the first instance.
  • What is eligible for Patent registration?

    Patents are granted for the invention of products or processes. However, for it to be patentable, the invention

    • Must be new,
    • Must have an inventive step that is not obvious to someone with knowledge and experience in the subject,
    • Must be capable of being made or used in some kind of industry and not be, a scientific or mathematical discovery, theory or method, a literary, dramatic, musical or artistic work, a way of performing a mental act, playing a game or doing business, the presentation of information, or some computer programs, an animal or plant variety, a method of medical treatment or diagnosis,
    • And must not be against public policy or morality.
  • When can I start renewal of the registration of my product(s) with NAFDAC?

    You can start renewal 6 months to the date of expiry.
  • Can my kids be shareholders in my company?

    Yes your kids can hold shares in your company but there must be a minimum of two adult shareholders before kids can be included.
  • Does Trademark registration protect my website domain name?

    Yes, it does.
All FAQs
Call Us Now on +234 901 719 0079 Chat on WhatsApp