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Section 3A Of Companies Act 2013: Members Severally Liable In Certain Cases

SECTION-3A (Members severally liable in certain cases) under CHAPTER-II (Incorporation of Company and Matters Incidental thereto) of the Companies Act 2013:—

“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.”

Extra Notes for Readers

(1) Section 3A of the Companies Act 2013 was introduced by the Companies (Amendment) Act, 2017. (w.e.f. 9th February, 2018 - MCA notification)
(2) Similar provisions were earlier applicable under Section 45 of the erstwhile Companies Act 1956.

This page was last updated on 10th February, 2018.

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