Explanation:

As per section 2(68) of Companies Act, 2013, Private Company means a company which by its AOA:

1. Restricts the right to transfer its shares
2. Except in case of OPC, Limits the number of members to 200,
3. Prohibits any invitation to public to subscribe for any securities of the company.

While calculating the limit of maximum number of members as 200 following will not be included:

1. Persons who are in employment of the company and are members of company
2. Persons who having been formerly in the employment of the company, were member of while in that employment and continue to be member even after cessation of employment