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Companies Act- Section 2(68) - Private Company

PRIVATE COMPANY

Section 2 Sub section (68)  defines the Private Company. The “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;

My review
This section is very similar to section 3(1)(iii) of the Companies Act, 1956 except for the deletion of the clause regarding the acceptance of deposits from shareholders, Directors and their relatives. IN the new definition that part is fully removed . The removal of the said clause has been substantiated by insertion of separate section(117), in which the acceptance of the deposits are permissible from certain category of persons with some exclusions.