Question

A private limited company limits the number of members to

• A. 30
• B. 50
• C. 40
• D. 150

Hint:

For exams, be aware of the changes between the 1956 and 2013 Companies Acts. The maximum number of members in a private company is a key difference: \textbf{1956 Act = 50 members}, \textbf{2013 Act = 200 members}. Always check the options to gauge which Act the question refers to.

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
The question asks for the maximum number of members a private limited company can have. This limit is one of the defining characteristics of a private company, distinguishing it from a public company. The options provided suggest that the question is based on the provisions of the Companies Act, 1956.
Step 2: Detailed Explanation:
\begin{itemize} \item Under the Companies Act, 1956: Section 3(1)(iii)(b) defined a private company as one which, by its articles, limits the number of its members to fifty. This number did not include persons who are in the employment of the company or who, having been formerly in the employment of the company, were members while in that employment and have continued to be members after the employment ceased. \item Under the Companies Act, 2013: The definition of a private company in Section 2(68) was amended. The maximum limit on the number of members was increased from fifty to two hundred. \end{itemize} Since the option '50' is available and '200' is not, the question is clearly framed based on the older Companies Act, 1956.
Step 3: Final Answer:
Under the legal framework presupposed by the options, a private limited company limits the number of members to 50.