Question

Jagannath Oils Limited is a public company and having 220 members of which 25
members were employee in the company during the period 1st April, 2006 to 28th
June 2016. They were allotted shares in Jagannath Oils Limited first time on 1
st July,2007 which were sold by them 1st August, 2016. After some time, on 1st December,2016, each of those 25 members acquired shares in Jagannath Oils Limited whichthey are holding till date. Now company wants to convert itself into a privatecompany. State with reasons:
a. Whether Jagannath Oils Limited is required to reduce the number of members.
b. Would your answer be different if above 25 members were the employee in
Jagannath Oils Limited for the period from 1st April, 2006 to 28th June, 2017?

Answer 1

Answer:

262990 is the answer because this video is forbidden

Answer 2

The company is required to reduce the number of members before converting it into a private company.

Explanation:

• Provisions of the law: As per the companies act, the total members of a private company must be restricted to 200 given that joint members will be counted as a single member.
• Employees who are members and ex-employees who became members during their employment and continued to be members after leaving the company will not be counted when counting for the number of members of the company.
• a) 25 members were employees of the company but not during the present membership which started from 1st December 2016 i.e., after the date on which these 25 members ceased to be employees in the company.
• Hence these 25 members will be taken into consideration for counting the limit of 200 members. So the company needs to reduce the number of members before converting into a private company.
• b) If those 25 members were ceased to be employees on 28th June 2017, they would've been employees at the time of getting present membership and will not be counted for the limit of 200 members.
• And then the total number of members would be 220 - 25 = 195 members. Therefore, in this scenario, the company is not required to reduce its members before converting into a private company.