Under Section 7(7) of the Companies Act, 2013, if a company has been i…

Question

Under Section 7(7) of the Companies Act, 2013, if a company has been incorporated by furnishing false or incorrect information, or by suppression of material facts, the NCLT may:

Accepted Answer

A. {'text': 'Pass such orders as it thinks fit and direct that the liability of the members shall be unlimited', 'label': 'A'}

1. Lesson 12's powers table for Chapter II of the Companies Act, 2013 includes Section 7(7).
2. The entry: "In case a company has got incorporated by furnishing any false or incorrect information or by suppression of any material fact or information, NCLT can pass such orders as it thinks fit and can also direct that **liability of the members shall be unlimited**."
3. The remedy pierces the corporate veil where incorporation was procured by fraud.
4. The other options describe powers not conferred by section 7(7).
_Source: ICSI CS Executive Paper 1 — Jurisprudence, Interpretation & General Laws, Lesson 12 (Special Courts, Tribunal under Companies Act and other Legislations), pp. 273-283._

Answer

{'text': 'Direct an immediate criminal prosecution of every member of the company under any provision of any law in force in any State of India regardless of any other consideration of any kind', 'label': 'B'}

Answer

{'text': 'Direct an immediate cancellation of the PAN and TAN of the company under any provision of any law in force in any State of India regardless of any other consideration of any kind', 'label': 'C'}

Answer

{'text': 'Direct an immediate withdrawal of all bank guarantees issued in favour of the company under any provision of any law in force in any State of India regardless of any other consideration of any kind', 'label': 'D'}