Membership in Company

MEMBERSHIP IN THE COMPANY

By Radhika Gohel

Who may be a member?1. Minor

2. Company

3. Subsidiary company

4. Partnership Firm

5. Foreigners

6. Fictitious Person

Who is member?

 According t section 41

I. The subscriber of MoA of a co. shall be deemed to have agreed to become member of the co., & on its registration , shall be entered in its register of member.

II. Every person who agree [in writing] to become member of a company and whose name is entered in the register of member shall be a member of the co.

Ways of Membership

A person may become a member of the company in any following ways:

1. By subscribing to the memorandum of association.

2. By application and allotment.

3. Agreeing to become director:

4. By transfer of shares.

5. By transmission of shares.

6. By holding out as a member or by estoppels

Termination of MembershipA person will cease to be a member of the company when his name is removed from the register of members. It may take place in any of the following ways:

1. When a person transfers his shares. In such a case the transferor ceases to be a member as soon as the transferee is registered but not before.

2. When his shares are validly forfeited by the company.

3. When a person makes a valid surrender of his shares of the company.

4. When a company sells the shares in exercise of its right of lien over them.

5. When he dies.

Cont.

 6. When he is declared insolvent.

7. When he repudiates the contract on the ground of false or misleading statement in the prospectus of the company.

8. When he is holding redeemable preference shares and such shares are redeemed.

9. When share-warrants are issued in exchange of fully paid-up shares and the articles do not recognize holders of share-warrants as members.

10. When the company is wound-up. But he remains liable as a contributory.

Liability of Member

Register of members

(a) The name, address, and occupation of each member.

(b) In the case of a company having a share capital, the shares held by each member with numbers and amount paid or considered to be paid on them.

(c) The date on which each member’s name was entered in the register.

(d) The date on which any person ceased to be a member; and

(e) If the shares have been converted into stock, and notice of conversion given to the registrar, it will show the amount of stock held by each member.

Rights of members

1. Claiming Share certificate

2. Duplicate certificate

3. Transfer of shares

4. Legal heir

5. Voting regarding dividend

6. Attending meetings

7. Appointing auditors

8. Appointing proxy

9. Copies of P&L A/c

10. Appointing & removing directors