Which of the following statements are true in context of a company under Company Act, 2013? 1. A company can become a member of another company 2. Member’s voluntary winding up takes place when the company is insolvent 3. Only board of director can convene Extraordinary General Meeting

The correct answer is: C. 1 and 3

• A company can become a member of another company. This is known as a subsidiary company. A subsidiary company is a company that is controlled by another company, known as the parent company. The parent company can control the subsidiary company by owning more than 50% of its shares.
• Member’s voluntary winding up takes place when the company is solvent. This means that the company has
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  enough assets to pay off its debts. In a member’s voluntary winding up, the directors of the company decide to wind up the company. They appoint a liquidator to sell the company’s assets and pay off its debts.
• Only the board of directors can convene an extraordinary general meeting. An extraordinary general meeting is a meeting of the shareholders of a company that is called to discuss important matters. The board of directors can call an extraordinary general meeting at any time. However, if 10% of the shareholders of the company request an extraordinary general meeting, the board of directors must call it within 21 days.

The following are the incorrect options:

• Option A is incorrect because it includes statement 2, which is false. Member’s voluntary winding up takes place when the company is solvent, not insolvent.
• Option B is incorrect because it includes statement 3, which is false. Only the board of directors can convene an extraordinary general meeting.
• Option D is incorrect because it includes all three statements, which are not all true.