Q.Under the Companies Act, 2013, the minimum number of members required to form a private company is:

A private company is one of the categories the Companies Act, 2013 defines by its minimum and maximum membership.

The Companies Act, 2013 fixes different minimum-member requirements for different types of companies under Section 3(1). For a private company, Section 3(1)(b) requires a minimum of two persons to subscribe to the Memorandum and form the company. This is lower than the minimum of seven persons required for a public company under Section 3(1)(a), reflecting the fact that a private company cannot raise capital from the general public and is usually a smaller, closely-held enterprise. A private company's membership can then grow up to a maximum of 200 members (excluding past and present employee-members) as it operates, but it can never legally be formed, or continue to exist as a private company, with only one member — a single individual who wants sole ownership with limited liability must instead form a One Person Company (OPC), which needs only one member.

Students often confuse the minimum-member rule for a private company (2) with that of an OPC (1) or a public company (7) — these three figures are frequently mixed up in exams. Remember the sequence: OPC = 1, Private = 2, Public = 7.