Study the following case/situation and express your opinion.
1) Two promoters got ‘Super Drinks Pvt. Ltd.’ incorporated on 18th Jan, 2018. The company
has 100 members as on 31st Mar, 2019.
a) What is the maximum number of members this company can have?
Ans:-
Super Drinks Private Ltd. company is a private company. As per the new provisions made in the Companies Act, 2013, the maximum number of members increased to 200. Hence this company can have a maximum of 200 members. Earlier the maximum number of members allowed in Private Company was 50.
b) Can this company invite general public to subscribe for shares?
Ans:-
Super Drinks Private Ltd. company is a private company. Hence this company cannot invite the general public to subscribe for shares.
c) Can the shareholders of the company sell its shares to outsiders?
Ans:-
Super Drinks Private Limited Company cannot sell its shares to the members of the public. However, shares and debentures of a private company are generally allotted and sold to the family members, close relatives, and friends. It does not invite the members of the public to subscribe to its shares and debentures. It collects its capital through private arrangements.
2) Kali VFX Ltd. was incorporated on 1st Jan, 2019 as a public limited company.
a) How many minimum number of members must be there in this company?
Ans:
Kali VFX Ltd. is a public limited company. In this company minimum 7 members must be there.
b) Can the members of this company sell its shares to outsiders?
Ans:- The members of this company can sell their shares to outsiders. This is because in case of public limited company shares are freely transferable and usually quoted on a Stock Exchange
c) How many maximum number of members can this company have?
Ans:-
Kali VFX Ltd. is a public limited company. In a public limited company, there is no limit on the maximum number of members
3) Sunset Printers Pvt. Ltd. was incorporated on 5th Dec, 2015 as per the provisions of Companies
Act 2013. Mr. Manoj was the only subscriber to the Memorandum and Articles of
Association and he was also the only member of the company.
a) Is this company a One Person company?
Ans:- The concept of ‘One Person Company was introduced to the companies Act, 2013. Since Sunset Printers Pvt. Ltd. was incorporated on 5th December, 2015 as per the provisions of Companies Act, 2013, it is a one-person company
b) Will the liability of Mr. Manoj be limited or unlimited?
Ans:-
The liability of Mr. Manoj Who is a member and promoter of the One Person Company has limited liability.
c) Will the company close down on the death, insanity or insolvency of Mr. Manoj?
Ans:-
One Person Company (OPC) Will not close down on the death, insanity or insolvency 0 Mr. Manoj. As per the provisions of Companies Act, 2013, Mr. Manoj must have appointed his son or daughter or any other close relative as a nominee with 15 days of his appointment or incorporation of OPC. Such nominee in the event of death, insolvency or insanity of Mr. Manoj will become a member of Sunset Printers Pvt. Ltd. and will be entitled to all shares, other rights and bear all liabilities.
4) On 1st Jan, 2018 Mr. John bought 100 shares of TIPS Paints Ltd. The face value of each
share was Rs. 10. Mr. John paid the full amount of Rs. 1000. In Dec, 2018 the company
suffered a loss of Rs. 10 crores.
a) Can the company ask Mr. John to pay any further money to the company?
Ans:-
Mr. John is a shareholder (member) in TIPS Paints Ltd. His liability is limited up to the unpaid part of the face value of shares held by him. Since he has paid the full amount on the shares he has purchased. The company cannot ask Mr. John to pay any further money to the company as the shares are fully paid-up, there is no further liability on the part of the shareholder.
b) Which feature of Joint stock company is referred to in this example?
Ans:-
The feature of limited liability of the members or shareholders is referred in the above case.
c) Explain the feature briefly.
Ans:-
(1)The term liability means the state of being responsible for something, especially by law. The liability of a shareholder of a joint-stock company is limited to the extent of the face value of the shares held by him. It is limited up to the unpaid part of the face value of shares held by him, the shareholder is liable to pay only the unpaid amount on his shares. If the share amount is fully paid, then there is no further liability on the part of the shareholder.
(2) The company undertakes greater risks because the liability of the members is limited. In the event of liquidation of the company, the personal property of the shareholders cannot be attached by the creditors of the company in settlement of their debts. In such a case the shareholders at the most may lose their investments in the shares of the company.