Question

Which statement accurately reflects the nature of liability for members of an Industrial Co-operative Society?

• A. Members have unlimited liability, meaning they are responsible for all debts of the society.
• B. Liability is limited to the extent of the member's initial capital contribution.
• C. Members are jointly and severally liable for all the society's obligations.
• D. The liability is limited to the unpaid amount on shares held by the member.

Answer 1

Answer:

D. The liability is limited to the unpaid amount on shares held by the member.

• Limited liability, typically confined to the nominal value of shares, is the most common form for industrial co-operatives to attract membership.