Membership

MEMBERSHIP
Definition: Section 41 provides that:
a) The subscriber to the memorandum.
b) Who agrees in writing to become member and
whose name appears in the register of members.
c) Who holds equity share capital and whose name is
entered as beneficial owner in the record of
depository .

Pre- Requisites for Becoming a Member:
a)The agreement in writing to take shares of the
company, and
b) The registration of name in the register of
members.

Member and Shareholder
• Section 2(27): The word member means a
‘shareholder’ excepting a person who is a bearer of
share warrant of the company.
• Srikanta Data v. Venkateshwara Real Estate
Enterprises (P) Ltd. (1990) 68 Comp. Cas. 216
• In case of unlimited company or a company limited
by Guarantee, a member may not be a shareholder,
for such company may not have share capital.
• For same set of shares one person may be a
member and another be the shareholder of the
company

Situation in a person continues to be a member but ceases to be a share

a) On sale
b) On Death
becoming insolvent

c) On

Modes of Acquiring Membership
By subscribing to the memorandum of association

Who may become a
Member
a) Minor: Position of a minor as a member of a company is follows as:

b) Company: A company may, if so authorized by its articles, become a

c) A partnership firm:

TERMINATION OF
MEMBERSHIP
A person may cease to be a member of a company when:

RIGHTS OF A MEMBER
Two major categories:

REGISTER OF A MEMBERS

Section 150: Register must contain following particulars: