An equity shareholder of a company:
1. has right to transfer his / her shares
2. is always deemed to be owner of assets of company
3. is called residual owner
Choose the correct statements from the codes given below:

Answer: [A] Only 1 & 3

The share implied the right to what assets remain after liquidation. A member who holds the shares of a company does not imply that the member owns any of the company’s assets. This is because assets would be still possessed by the company which is a legal person in itself. However, if the company is wound up, after selling its assets, the shareholder has the right to participate in the assets after the debts have been paid. This means that it is the right to what assets remain after liquidation. At the same time, the shareholder is also liable for the amount, if any unpaid on the shares held by him. This is also the reason that Equity shareholder is called Residual Owner.

This question is a part of GKToday's Integrated IAS General Studies Module