Which of the following statement is incorrect -
A private company is one which by its articles of association:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Its paid up share capital is not more than Rs. 50 Lakhs
Option 3 : “Its paid up share capital is not more than Rs. 50 Lakhs” is incorrect because this condition is no longer required for defining a private company.
The other conditions mentioned are valid.
NCERT: "Private Company: A private company is one which by its articles of association:
(a) Restricts the right to transfer its shares;
(b) A private company must have at least 2 persons, except in case of one person company;
(c) Limits the number of its members to 200 (excluding its employees);"