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CS Executive · Company Law and Practice · Members and Shareholders

Mehta Components Ltd, an unlisted company, closed its register of members for 20 days in April, giving the required notice, and then again for 28 days in September, again with notice. Each closure was separately within the limit of 30 days. What is the position under section 91?

The closures breach the law because 20 plus 28 gives 48 days, above the 45-day aggregate annual limit, even though each closure was under 30 days. The company and officers in default face a penalty under section 91(2) of five thousand rupees per day up to one lakh rupees.

  1. ABoth closures are valid because each was under 30 days
  2. BThe company may close the register for up to 60 days in aggregate
  3. CThe second closure is valid only if the Registrar permits it
  4. DThe aggregate of 48 days exceeds the 45-day annual limit, so the company is liable to a penalty under section 91(2)Correct

Explanation

Section 91(1) allows closure for periods not exceeding 45 days in aggregate in a year and not exceeding 30 days at one time. Here 20 + 28 = 48 days, exceeding 45 days, so the aggregate limit is breached. Section 91(2) imposes a penalty of five thousand rupees per day, subject to a maximum of one lakh rupees, on the company and officers in default. Satisfying only the 30-day limit is not enough.

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