Question

The maximum number of persons required to form a private company is

• A. 2
• B. 7
• C. 10
• D. 15

Hint:

Private companies typically require a minimum of two members to be formed.

Answer 1

The Correct Option is A

Company law sets two as the smallest number of subscribers needed to incorporate a private company, compared with seven for a public company. The larger figures of 10 and 15 do not match any statutory member threshold for either type of company, so the number required to form a private company is 2.

Answer 2

We can also compare private and public company member requirements side by side to see which number belongs where.

1. 2: This is the statutory minimum for a private company - the smallest founding group the law will recognise as sufficient to incorporate one.
2. 7: This is instead the statutory minimum for a public company, a different category of company with different founding requirements, so it doesn't answer this question about a private company.
3. 10: No provision in company law ties this number to the formation of any type of company.
4. 15: Likewise, this number has no statutory basis for company formation of either kind.

Lining the two company types up side by side makes it clear that 2 is the figure that belongs specifically to private companies.

Therefore, the correct answer is 2.