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CS Executive · Company Law and Practice · Introduction to Company Law

A body of two members, formed under another law and not previously registered under any Companies Act, applies to register under the Companies Act, 2013. Only two members are present. Which statement is correct?

It may register because two or more members suffice, and since it has fewer than seven members it must register as a private company. The earlier requirement of seven or more members was substituted by two or more members.

  1. AIt cannot register because at least seven members are needed
  2. BIt may register, and because it has fewer than seven members it must register as a private companyCorrect
  3. CIt may register only as a public company
  4. DIt may register only as a company limited by guarantee

Explanation

Section 366(2) allows a company with two or more members to register, and proviso (vii) says a company with less than seven members shall register as a private company. The seven-member minimum was replaced in 2018. So option 1 is correct.

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