Cue Cards
Rules regarding Minimum Number of Members in a company
Minimum Number of Members
A public company must have at least seven (7) members whereas a private company may have only two (2) members. If the number of members falls below the statutory minimum and the company carries on its business beyond a period of six months after the number has so fallen, the reduction of number of members below the legal minimum is a ground for the winding up of the company.
Consequences of non-Registration
Law does not recognize an illegal association. An illegal association cannot enter into any contract, cannot sue any members or any outsider, and cannot be sued by any members or outsiders for any of its debts. The members of the illegal association are personally for the obligations of the illegal association. A member may be liable to a fine of Rs. 1000 (One thousand). Any member of an illegal association cannot sue another member in respect of any matter connected with the association.
A public company must have at least seven (7) members whereas a private company may have only two (2) members. If the number of members falls below the statutory minimum and the company carries on its business beyond a period of six months after the number has so fallen, the reduction of number of members below the legal minimum is a ground for the winding up of the company.
Consequences of non-Registration
Law does not recognize an illegal association. An illegal association cannot enter into any contract, cannot sue any members or any outsider, and cannot be sued by any members or outsiders for any of its debts. The members of the illegal association are personally for the obligations of the illegal association. A member may be liable to a fine of Rs. 1000 (One thousand). Any member of an illegal association cannot sue another member in respect of any matter connected with the association.
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