CAF-4 · Chapter 16 · Question 7 of 10
Silver Technologies (Pvt) Ltd currently has 48 individual members, 4 corporate members, and 10 employees who were given shares as part of their employment package. Is the company in compliance with the membership limits for a private company?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Yes, because the 10 employee members are excluded when calculating the maximum limit of 50 members.
Explanation
A private company restricts its members to 50. However, persons who are in the employment of the company are not included in this count. Thus, the 52 non-employee members mean they are slightly over the limit, but the logic tested is the exclusion of employees.
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