Question

S1: When par value shares are issued above par, the premium or excess is to be considered as part of the legal capital

S2: Shares issued without par value shall be deemed fully paid and non-assessable and the holder of such shares shall not be liable to the corporation or its creditors in respect thereto.
A. Both are false
B. Both are true
C. True,false
D. False, true

Answer 1

When par value shares are issued above par, the excess is considered part of the legal capital. Shares issued without par value are deemed fully paid and non-assessable.

Step-by-step explanation:

S1: When par value shares are issued above par, the premium or excess is to be considered as part of the legal capital.

• This statement is true because when par value shares are issued above par, the excess amount is typically recorded as part of the company's legal capital.

S2: Shares issued without par value shall be deemed fully paid and non-assessable and the holder of such shares shall not be liable to the corporation or its creditors in respect thereto.

• This statement is true because shares without par value are typically considered fully paid and non-assessable. This means that the holder of these shares is not liable to the corporation or its creditors for any further payment.

Therefore, the correct answer is B) Both are true.