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CA Intermediate · Corporate and Other Laws · Incorporation of Company and Matters Incidental Thereto

Ananya, Bhaskar and Charu, all residents of Pune, wish to form a private company limited by shares to run a bakery. They have chosen the name 'Pune Bakers Private Limited'. Which of the following correctly states the minimum number of members and the minimum number of directors required for this private company?

A private company requires a minimum of two members and two directors under the Companies Act, 2013. Only a One Person Company can function with a single member and a single director, and a public company needs seven members and three directors, so the correct pairing is two and two.

  1. A2 members and 2 directorsCorrect
  2. B2 members and 1 director
  3. C3 members and 2 directors
  4. D7 members and 3 directors

Explanation

A private company needs at least 2 members and at least 2 directors; the One Person Company is the only private company that may have 1 member and 1 director. The option of 1 director is wrong because only an OPC can operate with a single director. The figures 7 and 3 are for a public company's minimum members and directors.

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