Section 14: Mode of forming a company

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.

Effective date: 2017-05-30

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