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What is meant by membership of a company? Explain the difference between member and shareholder.

Member of a company means any person whose name is mentioned in the register of members of the company as a member or as a beneficial owner of equity shares of a company in the records of the depository. Apart from this, the person who has given written consent to become the director of the company and take the qualifying share, then he is also considered to be a member of the company. According to para 2(55) the meaning of the member is as follows

 

1. Persons subscribing to the memorandum of the company i.e. signing it shall be deemed to have agreed to become members of the company and on the amalgamation of the company their names in the register of members of the company as members shall be written, he shall be a member of the company.

 

2. Every other person who makes an undertaking in writing to become a member of the company and whose name is entered in the register of members, shall be a member of the company.

 

3. Every person who is the holder of the share capital of a company and whose name is mentioned in the records of the educational institution as the beneficial owner, shall be deemed to be a member of that company.

 

Thus, any person can be a member of a company if he fulfills any of the following conditions:

(i) if he is a subscriber to the memorandum of a company and his name is mentioned in the register of members of that company in writing entered in the register of members of that company.

(iii) if a company is mentioned in the records of its depository as a beneficial owner thereof. (Shareholder may be Member, Shareholder) Generally it would have been said that “every registered shareholder is of the company that every member of the company is not necessary to be a shareholder.” The statement indicates the following facts that the registered company’s The reason why he is a member is because that shareholder is entered in his register of members. A company limited by shares and a company limited by guarantee share capital are synonymous meanings. go

 

Shareholder company need be member the company) It is not necessary for every shareholder company to be a member, because there are many such shareholders, they are unable to get their members registered in the following situations.

 

(i) Buyer’s share has been made, many people buy them but they are not able to get their names registered. Such person lives only when shares are not registered in his name

 

(ii) The nominee or statutory representative would have been a nominee member after his death but became a member when his name is registered in the register of members. The same situation would have been of a statutory representative.

 

(i) Having signed the memorandum of understanding, they are called members of the company, they become or are deemed to be members of the amalgamation of the company. Member shares are also not required. After the amalgamation, when the company allots the shares, as many shares are automatically allotted as agreed at the time of signing the memorandum. Thus the subscriber to the memorandum becomes even before the allotment of shares.

 

Go without capital. Generally, such companies having share capital created to promote science, charity and charity are member shareholders.

 

(iii) Ex-member Former member would neither be a shareholder of the company nor any member could be revoked.

(iv) any person exhibiting himself as the company or giving tacit consent to exhibit to other members

For, this can happen if he willfully allows his name to be written in the register of members after he has transferred all his shares. In such case he is liable as a member of the company though he is not actually a shareholder of the company.

 

(v) Seller of shares before transfer – If a registered shareholder has sold his shares, that shareholder continues to be a member of the company so long as the name of the seller remains in the register of members of the company. When the shares are registered in the name of the buyer, his membership will be terminated even though he ceases to be a shareholder.

 

(vi) Insolvent – When a member becomes insolvent, his shares and other properties become subject to the state recipient. As a result, the insolvent member ceases to be a shareholder of the company but must continue to be a member until those shares are registered in the name of some other person.

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