General Studies · Limited Liability and Corporate Insolvency
Regarding Ed Ltd's unpaid debt to Mick's Homes Ltd, which statement is correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Mick's Homes Ltd can pursue Ed personally for the debt because his company is insolvent.
- 2Mick's Homes Ltd cannot pursue the debt because Ed Ltd is insolvent.
- 3Mick's Homes Ltd may only pursue Ed Ltd for the debt, as shareholders generally have no liability for the company's debts beyond unpaid capital.✓
- 4Mick's Homes Ltd can claim the debt from Ed's personal assets since he is the sole owner.
Correct answer
Mick's Homes Ltd may only pursue Ed Ltd for the debt, as shareholders generally have no liability for the company's debts beyond unpaid capital.
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