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` Acc. To Sec 41(1) of Indian Companies Act,´All the person signing the
Memorandum of Association of the company are deemed to be the
members of the company and after the incorporation of the company,
their names are maintained in the register of members as members.

` Sec 41(2),´ Every person who is agreed in writing to be the member of

the company and whose name has been registered in the register of
the members, is the member of the company.


 

 
 

All the persons who are competent to contract according to the

provisions of the Indian Contract Act, 1872 can become the
member of the company.But there are some special
consideration in this regard. These are:
` A Company:
Can become the member of a company if MOA n AOA
authorises to do so. But certain exceptions in this regard:
1. Sec 77(1) states that a company cannot buy its own shares.
2. A subsidiary company , subject to certain exceptions as given
in Sec 42 cannot become the shareholder of its holding
company.
3. A Foreign company cannot become the member of a Indian
company if RBI not permitted.
` D
:
Only Karta can be a member of the company not the coparceners.
` ‰artnership
irm:
A partnership firm cannot become the member of the company , but
partner in his personal capacity, or two or more or all partners jointly
can be the members of the company.
`
oreigners:
If RBI authorises ,
but in times of war, his power of voting and his right to receive
notices is suspended.
` |arried Women
Can be a member if she is eligible.
` Mrustee:
Cannot become the member of the company as no notice of trust
can be entered in the register of the company(Sec 153)
` -egistered Society:
A Society which has been registered under the Societies Registration
Act, 1860 can become a member if its MOA n AOA authorises
` ×nsolvent:
Can be a member of a company , so long as his name appears in the
register of a company, he is a member n entitle to vote even though
his shares vest wid the official assignee or Reciever.
` |inor:
holly incompetent to enter in a contract so cant be a member.

` -epresentation of ‰resident or Governor:

1. President of India and Governor of any state can be a shareholder.
2. They hv to nominate any person , which they deem fit as a member
of a company to represent them in a meeting of a company, n that
member can exercise all that powers which the President n Governor
might hv used as a member of a company.
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` |embership by Allotment:
A person can become the member of the company only when he gets the
allotment of the shares applied by him.

` |embership By Mransfer:
If shares are transferred from one person to another as per the procedure
specified , the latter become the member of the company. He can be the
member of the company only after he is duly registered in the register of the
member of the company.

` |embership by transmission or succession:

A person can become the member if he gets the shares after the death or
lunacy or of insolvency of member n it shud be informed to the company n name
of the new member shud be registered.
` |embership by mortgage:
If a person grant a loan n accept the shares as mortgage , such a
person vl also be deemed to be a member of a company.

` |embership by signaturing the | A:

All the signatories to the MOA shall be deemed to be a member of a
company n after the incorporation of the company , their names vl be
registered as member in the register of the company , whether they
were alloted shares or not.

` |embership by agreeing to purchase qualification shares:

All the persons who hv agreed in writing to purchase the qualification
shares and act as the director of the company, are also in the same
position as a subscribers to the memorandum, and on the incorporation
of the company , they automatically become the members of the
company.
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` ×ndividual -ights:
Can be exercised by any of the member in his individual capacity.
1. -ight to inspect:
MOA n AOA
Register of members
Register of the Investments of the company
Register of the charges of the company
Register of the debentureholders
Minute book of the meetings of the company .
Rights of Directors, Managing Director, Secretary and treasurer etc.

2. -ight -egarding Shares:

to get the dividend.
to get the bonus shares if issued.
to transfer shares
to vote
3. -ight -egarding meetings:
` To present at the meeting
` To participate in the meeting
` To present a proposal
` To get the report of the meeting of the company
` To get the copy of the minutes of the meeting

{. -ight of getting copies:

` To get the copy of MOA n AOA
` To get the copy of trust
` To get share certificate
` To get the copy regarding the debentures
` To get the copy of annual statement
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1. -ight to apply to the 2. -ight to apply to the

central Govt: court:
` To call the AGM of the ` For the dissolution of
company the company
` To apply for the ` To call the AGM of the
appointment , if the company
auditor is not A member can submit
appointed by the an application to the
company court for the aforesaid
purposes.
` Collective -ights of the |ember of the company:

These rights can be exercised collectively by the members of the

company.

1. -ight of simple majority members:

These rights can be exercised by passing a resolution only-
` To present a resolution in the statutory meeting regarding statutory
report.
` For the appointments of the directors and the auditors
` For the removal of the directors
` For the conversion of the share capital
` For the conversion of the shares into stock and stock into shares
` Other works reqd if any.
2. -ight of two-third majority
members:
Can be exercised by passing a
special resolution.
` Amendments in MOA n AOA
` To shift the registered office of
the from one place to another.
` To get the order of change in
the objects of the company.
` To get the order of the
dissolution of the company.
` To get the order to reduce the
share capital of the company
ÿ. -ight of |inority
|embers:
` Right to call the EGM .It
requires minimum of 10%
voting rights.
` To cancel any change made
by the company in the rights of
the shareholders of the
company.
` Right to call for voting.
` If company is not working in
public interest ,may apply to
the court but 10% voting rights
should be there
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` If a company limited by shares ,name of the members of the
company is in the register of members,they can be said
shareholder or member«its immaterial«both can be used
interchangeably.But in certain cases he will ceases to be a
shareholder , though he continues to be the member of the
company-
1. On sale
2. On death
3. On becoming insolvent
` A person who is holding a share warrant is a shareholder but
he is not a member of the company as his name struck off the
Register of members.
` A person who subscribes to the MOA immediately becomes
the member, even though no shares are alloted to him.
` In case of company limited by guarantee having no share
capital or an unlimited company having no share capital, there
will be only members but not the shareholders.
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` By transfer of shares
` By death
` By surrender of shares
` By forfeiture of shares
` By insolvency
` On the basis of fraud or misrepresentation
` In case of share warrant
` By lien
` By the winding of the company
` By redemption of preference shares