A private limited company limits the number of members to:

Option A: 30

Option B: 50

Option C: 40

Option D: 150

Correct Answer

Option: b

Explanation

Under the Companies Act, 1956- A private limited company limits the number of members to 50. Note. According to Section 2(68) of the Companies Act, 2013-Private Company means a company having a minimum paid-up share capital as may be prescribed, and which by its articles, – (i) restricts the right to transfer its shares; (ii) except in case of One Person Company, limits the number of its members to two hundred: Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member: Provided further that- (a) persons who are in the employment of the company; and (b) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased, shall not be included in the number of members; and (iii) prohibits any invitation to the public to subscribe for any securities of the company;

Sample Mock Tests for Practice

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