Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

New defination of private limited companies

SANDIP (ARTICLE ASSISTANT) (213 Points)

24 December 2013

What is Minimum Member Requirement under the new Companies Act 203 ?

Reply
Follow
Share

3 Replies

CS BHAVIN SHETH (MANAGER-Company Secretary) (131 Points)
Replied 24 December 2013

Dear Sandip,

Minimum Memeber requirement is same as was in Companies Act,1956 as minimum 2 members only maximum limit is enhanced to 200 members ( In Old Act, it was 50 Members)

Also Please see the below mentioned definition of Private company as per new act,2013

“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;

regards

BHAVIN N SHETH

Upgrade to CAclubindia Pro. Subscribe Now!

SANDIP (ARTICLE ASSISTANT) (213 Points)
Replied 24 December 2013

Thanks bhavin

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

confused in above clause tha if only 2 shareholders & both of them are directors then what is no of memebers in same company 2 or 0 ? as directors are also employee of the company

CS BHAVIN SHETH (MANAGER-Company Secretary) (131 Points)
Replied 24 December 2013

Dear Sandeep,

Aptly said, its a bit confusing and to remove confusion, i have included definition of Member

for membership consideration, it will clarify your doubt

“member”, in relation to a company, means—
(i) the subscriber to the memorandum of the company who shall be deemed
to have agreed to become member of the company, and on its registration, shall
be entered as member in its register of members;
(ii) every other person who agrees in writing to become a member of the
company and whose name is entered in the register of members of the company;
(iii) every person holding shares of the company and whose name is
entered as a beneficial owner in the records of a depository;
No doubt in this that as directors hold shares, they are members of company,

regards

BHAVIN SHETH