Day: July 21, 2024

Which THRE of the following are characteristics of limited companies?

A Perpetual succession
B Separate legal personality
C Financial statements can remain private
D Simple withdrawal of capital
E Regulation under the Companies Act 2006
F The company’s liability is limited

Select ONE answer:

1. ABC
2. ABD
3. ABE
4. ABF

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct –> If a shareholder dies their shares are transferred to another person without any effect on the company at all – this is known as ‘perpetual succession’ (A). A limited company is legally distinct from its owners- it has a separate legal identity (B). Limited companies, both private and public, are subject to stringent regulations governing the keeping of accounting records, the filing of financial statements and the annual return with the Registrar and, in the case of large companies, the requirement to have an audit (E).
4. Not correct

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