Identify the false statement with regard to a company:

The correct answer is Option (3) → Every member of a company is entitled to take part in its management.

A company is owned by a large number of shareholders, but it is managed by a Board of Directors whom the shareholders elect. Owners and managers are separate, so the statement that every member can take part in management is false.

Option (1) A company is an artificial person. — A true statement. It is created by law and has a legal entity separate from its members.

Option (2) Company’s shares are generally transferable. — A true statement. Shares of a public company are freely transferable; only a private company restricts transfer.

Option (4) The director of a company may or may not be a shareholder. — A true statement. Under the Companies Act, 2013 a director need not hold shares; a company’s articles may still require qualification shares, and then its directors must hold them.