Question

Which of the following statements is true?

• A. The articles of a company shall state the objects for which the company is proposed to be incorporated.
• B. A private company may issue securities to public through prospectus and list the company in recognized stock exchange.
• C. Every listed public company shall have at least one-third of the total number of directors as independent directors.
• D. A company may be wound up by the Tribunal, if the company has, by ordinary resolution, resolved that the company be wound up by the Tribunal.

Hint:

Remember the key documents: Memorandum of Association (MOA) contains the fundamental objects and capital. Articles of Association (AOA) contain the internal rules and regulations.

Answer 1

The Correct Option is C

Let's analyze each statement according to the Companies Act, 2013:
(A) is false.
The objects of the company are stated in the Memorandum of Association, not the Articles of Association.

(B) is false.
A private company is explicitly prohibited from making any invitation to the public to subscribe for its securities.

(D) is false.
For a company to resolve to be wound up by the Tribunal, it requires a special resolution, not an ordinary resolution.

(C) is true.
Section 149(4) of the Companies Act, 2013, mandates that every listed public company must have at least one-third of its board comprised of independent directors.
This is to ensure good corporate governance.