Company law

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Querist : Anonymous

Querist : Anonymous (Querist)

19 February 2013 can emplyee be member in pvt ltd company? it's urgent

CA. Sunil Kumar

CA. Sunil Kumar (Expert)
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19 February 2013 According to section 3 of companies Act, private company limits the no of members to 50 and not including :-
persons who are in the employment of the company, and
(ii) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased;

hence the employees can be member but they will not be counted for the purpose of counting no.

Querist : Anonymous

Querist : Anonymous (Querist)

20 February 2013 sir then any loophole an employee can act as member

CA. Sunil Kumar

CA. Sunil Kumar (Expert)
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21 February 2013 Yes dear, they can be members but will not counted in maximum no of shareholder ( Limit of 50 members)

An employee can be an employee as well as member of the company.

for example :- company gives ESOP for motivating employees to reward their contributions.

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