Commercial Applications
The number of members in a private company are :
- Minimum = 5, Maximum = 100
- Minimum = 2, Maximum = 200
- Minimum = 7, Maximum = No limit
- None of these
Answer
Minimum = 2, Maximum = 200
Reason — A private company must have a minimum of 2 members and a maximum of 200 members (excluding members who are or were in the employment of the company). This is one of the key distinguishing features of a private company as per the Companies Act, 2013. A public company, in contrast, requires a minimum of 7 members with no maximum limit.
Related Questions
Statement I : A public company is required to publish and file its accounts.
Statement II : It is very easy to maintain business secrets.
- Only I is correct
- Only II is correct
- Both I and II are correct
- Both I and II are wrong
Types of companies are :
- Registered Companies
- Chartered Companies
- Statutory Companies
- All of these
Why is the principle of limited liability important for shareholders in a joint stock company?
- It allows shareholders to transfer shares freely.
- It restricts the financial loss of shareholders to the unpaid value of shares.
- It ensures shareholders participate in daily management.
- It makes shareholders responsible for company debts.
A company faces criticism for taking too long to make decisions due to bureaucratic delays. Which disadvantage of joint stock companies is highlighted here?
- Lack of motivation
- Delay in decision-making
- Conflict of interests
- Unhealthy speculation