Multiple choice

Which of the following is/are correct with respect to The Companies Act, 1956?

(a) Minimum number of members in a private company is 2. (b) Maximum number of members in a public company is 50. (c) Minimum number of directors in a private company is 3. (d) Maximum number of directors in a public company is restricted to 12.

  1. Only (a)

  2. (a) and (d)

  3. (a), (c), and (d)

  4. None of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Minimum number of members required to form a private company is 2, whereas a public company requires at least 7 members. Maximum number of members in a private company is restricted to 50, there is no restriction of maximum number of members in a public company. The Companies Act, 1956 prescribed minimum 2 directors for a private and 3 for a public company to constitute a Board. This criterion has been retained by the new Act, but the maximum limit of directors on the Board has now been raised from 12 to 15. Thus, only a is correct.

Keep practicing — related questions