Section 22: Private company

(1) Private company is one which is stated in its memorandum of association to be a private company.
(2) Subject to the provisions of the articles, a private company may restrict the transfer of its shares and also provide that—
(a) the company shall not, without the consent of all its members, sell assets having a value of more than 50% of the total value of the company’s assets;
(b) a member shall not sell that member’s shares in the company to a non-member, without first offering those shares to existing members; and
(c) a member, or a group of members acting together, shall not sell or agree to sell more than 50% of the shares in the company to a person who is not then a member, unless that non-member has offered to buy all the existing members’ interests on the same terms.
(3) The total number of members of a private company shall not exceed 50, not including persons who are bona fide in the employment of the company, or were, while in that employment and have continued after the determination of that employment, to be members of the company.
(4) Where two or more persons hold one or more shares in a company jointly, they shall, for the purpose of subsection (3), be treated as a single member.
(5) A private company shall not, unless authorised by law, invite the public to—
(a) subscribe for any share or debenture of the company; or
(b) deposit money for fixed periods or payable at call, whether or not bearing interest.