Parasnath Infraheight Limited is a public company and having215 members of which20 members were employees in the company during the period 1st June,…

(a) According to Section 2 (68) of the Companies Act,2013, “Private company” means a company having a minimum paid- up share capital as may be prescribed, and which by its articles, — (i) restricts the right to transfer its shares; (ii) except in case of One Person Company, limits the number of its members to two hundred: Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member. Provided further that — (A) persons who are in the employment of the company; and (B) 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, shall not be included in the number of members; and (iii) prohibits any invitation to the public to subscribe for any securities of the company. In the given problem, Parasnath Infraheight Limited is a public company and wants to convert itself into a private company. It is having215members out of which20members were employees during the period 1 st June, 2022 to 30 th June, 2024. These members were members in the company from 1 st April, 2018 which are held by them till date i.e.31 st August, 2024. Following the provisions of Section 2 (68) of the Act,20 members were employees of the company, but they were not employee at the time of getting membership and nor on existing date i.e.31 st August, 2024. Hence, they will be considered as members for the purpose of the limit of200members. Therefore, the company is required to reduce the number of members before converting it into a private company.