Companies Act, 2017 — section 14

14. Mode of forming a company..—(1) Any

(a)three or more persons associated for any lawful purpose may, by subscribing their names to a memorandum of association and complying with the requirements of this Act in respect of registration, form a public company; or

(b)two or more persons so associated may in the like manner form a private company; or

(c)one person may form a single member company by complying with the requirements in respect of registration of a private company and such other requirement as may be specified. The subscriber to the memorandum shall nominate a person who in the event of death of the sole member shall be responsible to

(i)transfer the shares to the legal heirs of the deceased subject to succession to be determined under the Islamic law of inheritance and in case of a non Muslim members, as per their respective law; and

(ii)manage the affairs of the company as a trustee, till such time the title of shares are transferred: Provided that where transfer by virtue of this sub-section is made to more than one legal heir, the company shall cease to be a single member company and comply with the provisions of section 47.

(2)A company formed under this section may be a company with or without limited liability, that is to say

(a)a company limited by shares; or

(b)a company limited by guarantee; or

(c)an unlimited company. 15. Liability for carrying on business with less than three or, in the case of a private company, two members.—If at any time the number of members of a company is reduced, in the case of a private company other than a single member company, below two or in the case of any other company, below three and the company carries on business for more than one hundred and eighty days while the number is so reduced, every person who is a member of the company during the time that it so carries on business after those one hundred and eighty days and is cognizant of the fact that it is carrying on business with fewer than two members or three members, as the case may be, shall be severally liable for payment of whole debts of the company contracted during that time and may be sued therefor without joinder in the suit of any other member. GENERAL PROVISIONS WITH RESPECT TO REGISTRATION OF MEMORANDUM AND ARTICLES