Skip to content

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

Vistara Components Ltd, a company whose members' liability is already limited by another Act of Parliament, wants to register under the Companies Act, 2013. Which registration is it barred from choosing?

It cannot register as an unlimited company or as a company limited by guarantee, because its members' liability is already limited by another law. It may still register as a company limited by shares if the share-capital conditions are met.

  1. ACompany limited by shares, if it has permanent share capital of fixed amount
  2. BPrivate company, if it has fewer than seven members
  3. CUnlimited company or company limited by guaranteeCorrect
  4. DAny type, since no restriction exists

Explanation

Proviso (ii) of section 366(2) says a company whose members' liability is limited by another Act of Parliament or law shall not register as an unlimited company or a company limited by guarantee. Registration as a company limited by shares remains possible subject to proviso (iii). Hence option 2.

Did you get it right without looking?

One question tells you little. A timed set on Introduction to Company Law shows your real accuracy, how long you take and where you lose marks.

Practise Introduction to Company LawFree diagnostic mock

More Introduction to Company Law questions