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

Meera, Nitin and Ojas wish to form a private company, Kaveri Agro Pvt Ltd, with Meera as the only person who will be a member of the first board. Before the MoA and AoA are filed, Ojas asks who may be subscribers to the memorandum of a private company. Under the Companies Act, 2013, what is the minimum number of subscribers needed to form a private company?

A private company needs a minimum of two subscribers to its memorandum. One person is enough only for a One Person Company, while a public company needs seven subscribers. Hence for an ordinary private company like Kaveri Agro Pvt Ltd, two persons are sufficient.

  1. AOne person
  2. BTwo personsCorrect
  3. CThree persons
  4. DSeven persons

Explanation

A private company can be formed by two or more persons subscribing their names to the memorandum. One person is the rule for a One Person Company, which is a separate type. Three is for a public-company-style minimum of seven being wrong too, as seven applies to public companies.

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