CMA Intermediate · Business Laws and Ethics · Company Types, Promotion, Formation and Related Procedures
Under the Companies Act, 2013, a group of individuals, each of whom is a producer, wishes to form a Producer Company. What is the minimum number of such individuals required if no Producer Institutions join them?
The minimum is ten. The Act permits ten or more individuals who are producers to form a Producer Company. Two is enough only where the members are Producer Institutions, so individuals acting alone need at least ten.
- ATwo
- BSeven
- CTenCorrect
- DTwenty
Explanation
The Act allows any ten or more individuals, each being a producer, or two or more Producer Institutions, or a combination of ten or more individuals and Producer Institutions, to form a Producer Company. With individuals alone, the minimum is therefore ten. Two is the minimum only for Producer Institutions, and seven is the figure for a public company, not for this case.
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