Meaning of “private company”

(1) For the purposes of this Act, the expression “private company” means a company which may be formed by one or more persons and which by its articles– (a) restricts the right to transfer its shares; (b) limits the number of its members (exclusive of persons who are in the employment of the company and of persons who, having been formerly in the employment of the company, were, while in such employment, and have continued after the determination of such employment, to be members of the company) to fifty; and (c) prohibits any invitation to the public to subscribe for any shares or debentures of the 102 (2) A private company may, subject to anything contained in the memorandum or articles, by passing a special resolution and by filing with the Registrar such a statement in lieu of prospectus as the company, if a public company, would have had to file before allotting any of its shares or debentures, together with such a statutory declaration as the company, if a public company, would have had to file before commencing business, turn itself into a public company. (3) Where two or more persons hold one or more shares in a company jointly they shall, for the purposes of this section, be treated as a single member. (4) Where the articles of a company include the provisions which, by this section, are required to be included therein in order to constitute the company a private company, and default is made in complying with any of those provisions, the company shall cease to be entitled to the privileges and exemptions conferred on private companies under section 27 (3), sections 115, 116 and section 130 (d) and thereupon the said provisions shall apply to the company as if it were not a private company, provided that the court, on being satisfied that the failure to comply with the conditions was accidental or due to inadvertence or to some other sufficient cause, or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any other person interested, and on such terms and conditions as seem to the court just and expedient, order that the company be relieved from such consequences as aforesaid. (5) Every private company shall send with the annual list of members and summary required to be sent under section 27, a certificate signed by a director or the secretary that the company has not, since the date of the last return, or in the case of a first return since the date of the incorporation of the company, issued any invitation to the public to subscribe for any shares or debentures of the company, and, where the list of members discloses the fact that the number of members of the company 103 exceeds fifty, also a certificate so signed that such excess consists wholly of persons who under this section are to be excluded in reckoning the number of fifty. Division 1 Winding-up Preliminary