New 55% Off on All Courses - Enroll Now! Click Here

    Question

    When are the members of a Company considered to be

    severally liable under the Companies Act, 2013?
    A If the number of members of a company is not as required and the company carries on business for more than six months while the number of members is so reduced, Correct Answer Incorrect Answer
    B If the number of members of a company is reduced below the required number and the company carries on business for six months while the number of members is so reduced Correct Answer Incorrect Answer
    C If the number of members of a company is reduced below the required number and the company carries on business for more than six months while the number of members is so reduced Correct Answer Incorrect Answer
    D If the number of members of a company is reduced below the required number and the company carries on business for less than six months while the number of members is so reduced Correct Answer Incorrect Answer
    E If the number of members of a company is more than the required number and the company carries on business for more than six months while the number of members is so reduced, Correct Answer Incorrect Answer

    Solution

    Sec. 3A Members severally liable in certain cases: If at any time the number of members of a company is reduced, in the case of a public company, below seven, in the case of a private company, below two, and the company carries on business for more than six months while the number of members is so reduced, every person who is a member of the company during the time that it so carries on business after those six months and is cognizant of the fact that it is carrying on business with less than seven members or two members, as the case may be, shall be severally liable for the payment of the whole debts of the company contracted during that time, and may be severally sued therefor.

    Practice Next