CMA Intermediate · Business Laws and Ethics · Company Types, Promotion, Formation and Related Procedures
Mehta Textiles Pvt Ltd, a company registered after the commencement of the Companies Act, 2013, filed articles that say nothing about the quorum for board meetings. Model articles applicable to it do contain a quorum rule. What is the legal position?
The model articles' quorum regulation applies automatically. Under Section 5(8), for a company registered after the Act's commencement, model article regulations that its registered articles do not exclude or modify become its regulations as though contained in its registered articles.
- AThe model articles' quorum regulation applies to the company as if it were in its registered articlesCorrect
- BThe company has no quorum rule until it amends its articles
- CThe Registrar must prescribe a quorum for the company
- DThe model articles apply only if all members consent in writing
Explanation
Under Section 5(8), for a company registered after commencement, model article regulations not excluded or modified by its registered articles apply, so far as applicable, as if they were in the registered articles. The silent articles therefore do not leave a gap.
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