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CSEET · Business Laws and Management · Elements of Company Law

After Sunrise Foods Ltd. was incorporated, it was proved that incorporation was obtained by suppressing material facts. Which order can the Tribunal pass on an application, after giving the company a reasonable opportunity of being heard?

The Tribunal may direct that the liability of the members shall be unlimited. Section 7(7) also permits regulating management, removing the company's name from the register, or winding up, after hearing the company. Imprisonment of shareholders or conversion into a partnership is not among its powers.

  1. ADirect that the liability of the members shall be unlimitedCorrect
  2. BDirect that all shareholders be imprisoned
  3. CConvert the company into a partnership firm
  4. DRequire the Registrar to change the promoters' nationality

Explanation

Section 7(7) lets the Tribunal regulate management, direct that members' liability be unlimited, direct removal of the company's name from the register, order winding up, or pass other fitting orders. It does not allow imprisoning shareholders or converting the company into a partnership.

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