Smooth Products Ltd. is a public company with 260 members as follows: Directors & their relatives: 15 Employees at registered office: 10 Employees at factory: 32 Ex-Employees [shares were allotted when they were empl

As per the provisions of section 2(68) of the Companies Act, 2013, a 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 of its shares (b) except in case of one-person company, limits the number of its members to two hundred, provided that: (i) where two or more persons hold one or more shares in a company jointly, they shall be treated as a single member; (ii) persons who are in the employment of the company and persons who having been in the employment of the company, were members of the company while in the employment and have continued to be members after the employment ceased, shall not be included in the number of members; (c) prohibits any invitation to the public to subscribe for any securities of the company. In view of the above provisions, for conversion of Smooth Products Ltd. into a private company, no actions for reduction of number of members will be required to be taken as 42 (10+32) employees and 28 ex-employees will be excluded for consideration of the limit of 200 members. After excluding employees and ex-employees, there will be 190 (260 less 70) members as per the above provisions, which is within the limit of 200 members as provided under Section 2(68) of the Companies Act 2013. Hence, the board resolution can be implemented without reduction of numbers of members of the company. In addition, relevant provisions of the Companies Act, 2013 and Companies (Incorporation) Rules, 2014 have to be complied with.