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

Kaveri Associates, an existing body whose members' liability is not limited by any law, plans to register as a limited company. Members present in person or by proxy at the meeting called for the purpose are 40. What is the minimum assenting majority?

Not less than three-fourths of the members present in person, or by proxy where allowed, must assent. A simple majority is the general rule, but registering as a limited company from unlimited liability needs the higher three-fourths majority.

  1. AA simple majority of members present
  2. BNot less than three-fourths of members present in person or by proxyCorrect
  3. CTwo-thirds of the total membership
  4. DUnanimous consent of all members

Explanation

Under proviso (v) of section 366(2), where the company's members do not have limited liability under any law and it is about to register as a limited company, assent of not less than three-fourths of members present in person or by proxy is required. Here that means at least 30 of 40. A simple majority applies only generally under proviso (iv).

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