Question

A private company is one which has a minimum paid up share capital of $Rs.1,00,000$ or such higher paid up share capital as may be prescribed by its Article of Association and which __________.

• A. Restricts the right to transfer its share, if any
• B. Prevent the public from subscribing for any shares or debentures of the company
• C. Prohibits any invitation or acceptance of deposits from persons other than its members and directors or their relatives
• D. All the above

Answer 1

The correct option is D All the above

Section 2 Sub section (68) of the Companies Act 2013, defines the Private Company. The “private company” means a company having a minimum paid-up share capital of one lakh rupees or such higher paid-up share capital as may be prescribed, and which by its articles:
(i) restricts the right to transfer its shares;
(ii) except in case of One Person Company, limits the number of its members to two hundred:-
Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause be treated as a single member:
Provided further that:-
(A) persons who are in the employment of the company and
(B) persons who having been formerly in the employment of the company were members of the company while in that employment and have continued to be members after the employment ceased shall not be included in the number of members; and
(iii) prohibits any invitation to the public to subscribe for any securities of the company.