shares of the company jointly

define minimum paid up capital of Rs. I lakh or such higher paid up capital as may be prescribed, and by its Articles
(i) restricts the right of the members to transfer shares, if any;
(ii) limit the number of its members to fifty, excluding members who arc or were in tbe employment of the company.
(iii) prohibits any invitation to the public to subscribe for any shares in, or debentures of the company; and
(iv) prohibits any invitation or acceptance of deposits from persons other than its members, directors or their relatives.
The words 'if any' used in sub-clause (a) above signifies that a’ private company having no share capital, need not contain in its Articles, tI1is restriction because it carries no meaning for such a company. For the purpose of counting the number of members in compliance of sub-clause (b) above. the following points should be noted
(i) present employee or ex-employees who bad become members when they were employees and had continued to be members cessation of employment, and
(ii) where two or more persons bold one or more shares of the company jointly, tbey shall be treated as a 'single member'.
(iii) By virtue of Sec. 3(1) (iv), defining a public company, a private limited company which is a subsidiary of a public company will be a public company, even if it is incorporated as a private company. Existing Private Companies. The Companies (Amendment) Act 2000
also provides that every private company existing on the date of commencement ofthe Amendment Act (i.e. 13th December 2000) having a paid up share capital of less than Rs. 1 lakh, shall witI1in a period of two years from the date of commencement of the Amendment Act, enhance its paid up share capital to Rs. 1 lakh. If it fails to comply this provision with in the specified time limit. the company shall be deemed to be a defunct company and its name shall be stmck off from the Register of Companies maintained by tlle Registrar of Companies and thus, it will cease to be a company from such date. However, a private company registered uls 25 as 'licenced company has been exempted from cOl:plying with the requirement
of minimum paid up capital. A private company which has paid up capital of less than Rs. 1 lakh will be an illegal association if the number of its members is more than 20 (ormore than lOin case of a banking company). If the number of members is below 20 (or below 10 in case of a banking company), it will be a valid association of persons, but the liability of its members shall be unlimited.