Question

Assertion (A): A company, whether public or private, can have any number of shareholders.

Reason (R): A public limited company can have any number of shareholders but a private company can have maximum 100 shareholders excluding its past and present employees.

In the context of above two statements, which of the below options is correct?

Options

• Assertion (A) and Reason (R) are correct but Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).

• Assertion (A) is false but Reason (R) is true.

• Both Assertion (A) and Reason (R) are false.

Answer 1

Both Assertion (A) and Reason (R) are false.

Explanation:

A private company cannot have an unlimited number of shareholders; its maximum number of members is 200. Therefore, both the Assertion and the Reason stating a maximum of 100 shareholders are incorrect.