What are the liabilities on members for having below minimum membersâ€™ strength?
The MCA vide the Companies (Amendment) Act, 2017 has inserted new section 3A w.e.f. 9-2-2018, vide Notification No. SO 630(E), dated 9-2-2018 to put liability on all the existing members of the company, in case the company defaults in minimum number of membersâ€™ criteria. If at any time the number of members of a company is reduced, in the case of a public company, below seven, in the case of a private company, below two, and the company carries on business for more than six months while the number of members is so reduced, every person who is a member of the company during the time that it so carries on business after those six months and is cognisant of the fact that it is carrying on business with less than seven members or two members, as the case may be, shall be severally liable for the payment of the whole debts of the company contracted during that time, and may be severally sued therefor.