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Could you please help me out on the following question:
Which of the following statements in regards to a company’s legal personality is correct?
A. Separate legal personality exempts members from liability if the Company is liquidated
B. Separate legal personality only applies to private limited companies
C. Separate legal personality does not apply to unlimited liability companies
D. Separate legal personality can be ignored in certain circumstance.
I know that D. is true (lifting the veil), but my first instinct was C. Isn’t the whole point of an limited liability company to limit the liability of the members using the separate legal personality concept, therefore, by definition, that concept would not apply to unlimited liability companies?
But that’s a different question!
The company, even though it is an unlimited company, is still a separate person
What you are confusing it with is the limitation on the liability of members
In an unlimited company, that liability is limited whereas in an unlimited company the members’ liability is unlimited
But both types of company are separate legal persons