Jagannath Oils Limited is a public company and having 220 members. Of which 25 members were employed in the company during the period 1 st April…

Provisions of Law: 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, — (A) restricts the right to transfer its shares; (B) 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— persons who are in the employment of the company; and 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 (C) prohibits any invitation to the public to subscribe for any securities of the company; Analysis: (i) Following the provisions of Section 2(68), 25 members were employees of the company but not during present membership which was started from 1 st December 2025 i.e. after the date on which these 25 members were ceased to the employee in Jagannath Oils Limited. Hence, they will be considered as members for the purpose of the limit of 200 members. The company is required to reduce the number of members before converting it into a private company. (ii) On the other hand, if those 25 members ceased to be an employee on 28 th June 2026, they were employee at the time of getting present membership. Hence, they will not be counted as members for the purpose of the limit of 200 members and the total number of members for the purpose of this sub-section will be 195. Therefore, Jagannath Oils Limited is not required to reduce the number of members before converting it into a private company. Conclusion: (i) Jagannath Oils Limited is required to reduce its number of members to 200 or less before converting to a private company, as the 25 former employees who re-acquired shares on 1 st December 2025 are counted towards the 200-member limit. (ii) If the 25 members ceased to be employees on 28 th June 2026, they would have been employees at the time of acquiring their current membership. In this scenario, they would not be counted towards the 200-member limit, and the company would not need to reduce its members for conversion.