See also types of business A company limited by guarantee. Commonly used where companies are formed for non-commercial purposes, such as clubs or charities.
The members or the shareholders are the real owners of a company. They collectively constitute the company as a corporate body. The powers of the Board are also subject to the control and supervision of the general body of the members.
Meaning and Definition The Companies Act divides the members into three classes. The persons who have subscribed to the Memorandum of a company. Every other person who has agreed in writing to become a member of the company and whose name has been entered in the Register of Members.
Every person holding equity share capital of Company law membership company and whose names are recorded as beneficial owner in the depository records are considered as members of the concerned company. From the above, it is clear that all the subscribers to the Memorandum are deemed to be the members of the company even though their names do not appear in the Register of Members.
But the Act provides that their names must be entered in the Register on its registration. As regards the second category of members, the criteria of membership are- 1.
If any one of the conditions is not satisfied, the person shall not be a member under this Company law membership. For the third category of members also 2 conditions are to be fulfilled to become the member of the company such as The person must hold equity shares of the company.
His name must be entered as beneficial owner in the records of the depository. A member can be distinguished from a shareholder in the following circumstances: A registered member of a company having no share capital is not a shareholder since the company itself has no share capital.
A person who holds a share warrant is a shareholder but he is not a member of the company. The legal representative of a deceased member is only a shareholder but not a member. To acquire membership, the legal representative of the deceased member should apply to the company and get his name registered in the register.
Who can become a member?
The company law does not prescribe any disqualification, which would depart a person from becoming a member of a company. It appears that any person who is competent to enter into valid contract can become a member of a company. The reason is obvious.
Subscribing for shares is basically a contract between the company and the shareholder. However, the Memorandum or Articles may impose certain restrictions or restrain certain persons from acquiring membership in a company. In the absence of any express provision regarding the capacity of a person, the provisions of the Contract Act shall apply.
As regards to certain special category of persons, the judiciary has laid down certain principles for acquiring membership in a company. They are as follows: A minor, is not a competent person to enter into a valid contract. As such, he is disqualified to acquire membership.
However, minors may be allotted shares. On attaining majority, the minor can avoid the contract. But the minor should repudiate the contract within a reasonable time. A lunatic cannot become a member. An insolvent, however, can become a member and is entitled to vote at the meetings of the company.
But his shares vest in the Official Receiver when he is adjudged insolvent. A partnership firm may hold shares in a company in the individual name of partners as joint holders. But the shares cannot be issued in the name of the partnership firm, as it is not a legal person in the eye of law.
A company, being a legal person, can become the member of another company in its own name. But a company can subscribe for the shares of another company only when it is authorized by Memorandum. Similarly, a subsidiary company cannot buy the shares of its holding company.
Foreign national can be members of companies registered in India. For that permission of RBI is mandatory.
When he turns an alien enemy, his right as a member will be suspended. A person who takes the shares in the name of fictitious person becomes liable as a member. Besides, such a person can be punished for impersonation under section A.The member or shareholder of the company is the person who collectively constitutes the company as a corporate entity.
The term member shareholder and holder of share are used interchangeable timberdesignmag.com they are synonymous in the case of the company limited by shares. A company . BLACK SEA LAW COMPANY was established in and has rapidly gained a major share of the legal market, becoming one of the leading maritime law firms in Ukraine..
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South African company law is that body of rules which regulates corporations formed under the Companies Act. A company is a business organisation which earns income by the production or sale of goods or services.
This entry also covers rules by which partnerships and trusts are governed in South Africa, together with (albeit in less detail) cooperatives and sole proprietorships.
“Bank” means (A) a banking institution organized under the laws of the United States or a Federal savings association, as defined in section (5) of title 12, (B) a member bank of the Federal Reserve System, (C) any other banking institution, savings association, as defined in section (4) of title 12, or trust company, whether incorporated.
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