Q.Who can demand liquidation of the company?

A private company can be wound up if members fall below the minimum of 2, i.e. less than 2 — option (C).

The law prescribes a minimum number of members: 2 for a private company and 7 for a public company. If, after incorporation, the number of members falls below this statutory minimum and the company still carries on business, it becomes a ground on which the company may be wound up. For a private company that minimum is 2, s …

A debenture holder, being a creditor, can demand liquidation (winding up) of the company.

Winding up can be sought by those with a recognised interest in the company — the company itself, its creditors and its contributories, and in certain cases the Registrar or Central Government. A debenture holder lends money to the company and is therefore a creditor; if the company fails to pay interest or repay principal, the debenture holder can apply for winding up to re …