Question 10. Who is bound by transactions entered into by a company?
Read the statements below and select the best one.
(a) Because it is a legal person in its own right, it is the company itself that acquires legal rights and duties. The members of the company are not themselves bound by the transactions entered into by the company.
(b) Although a company is said to have its own legal identity, this does not mean that it can itself acquire legal rights and duties. It is the members of a company that are bound by the transactions entered into by the company.
