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

A non-limited-liability body with 40 members, formed under another law, proposes to register under Section 366 as a limited company. At a general meeting summoned for the purpose, 20 members are present in person or by proxy. What assent is needed?

Assent of not less than three-fourths of the members present in person or by proxy at the meeting is needed. Under Section 366, when a company without limited liability registers as a limited company, the higher three-fourths majority of those present applies, not a simple majority or all members.

  1. AA simple majority of those present
  2. BNot less than three-fourths of the members present in person or by proxyCorrect
  3. CUnanimous assent of all 40 members
  4. DNot less than three-fourths of all 40 members on the register

Explanation

Proviso (v) to Section 366(2) states that where a company whose members' liability is not limited by any law is about to register as a limited company, the majority must be not less than three-fourths of the members present in person or by proxy at the meeting. A simple majority (proviso iv) applies generally, but not here. The base is members present, not all members.

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