LAW 256 UNIT III MEMBERSHIP OF A COMPANY Ashish

Transcript:LAW 256 UNIT III MEMBERSHIP OF A COMPANY Ashish:
LAW 256 UNIT III MEMBERSHIP OF A COMPANY Ashish Singh Taank Assistant Professor REGISTER OF MEMBERS Every company has to keep and maintain certain registers in such form and such manner as may be prescribed. Such registers are: register of members indicating separately for each class of equity and preference shares held by each member residing in or outside India register of debenture holders; and register of any other security holders. MEMBERSHIP OF A COMPANY The words "member" and "shareholder" are used interchangeably and, generally speaking, apart from a few exceptional cases, they are synonymous. Member in relation to a company means: subscriber to the memorandum of the company deemed to have agreed to become member of the company and, on its registration, is to be entered as member in the register of members person who agrees in writing to become a member of the company and whose name is entered in register of members person holding shares of the company and whose name is entered as a beneficial owner in the records of a depository How to become a member BY SUBSCRIBING TO MEMORANDUM OF ASSOCIATION The subscribers of the memorandum of association shall be deemed to have agreed to become the members of the company, and on its registration shall be entered as members in the register of members The subscriber of the memorandum is to be treated as having become a member by the very fact of subscription. Neither application form, nor allotment of, shares is necessary. Even an absence of entry in the register of members cannot deprive him of his status. He acquires, as soon as the company is registered, the full status of a member with all the rights and liabilities. BY ALLOTMENT OF SHARES A person may become a shareholder by agreeing in writing to take shares in the company by allotment. There are two types of shareholders: EQUITY SHAREHOLDERS are the main stakeholders in a company and when the time of dividend distribution comes the preference shareholders would get the first. PREFERENCE SHAREHOLDERS generally have no voting rights because of their preferred status. They receive fixed dividends, generally larger than those paid to common stockholders, and their dividends are paid before common shareholders. BY TRANSMISSION OF DEAD SHAREHOLDER’S SHARES TO HIS HEIRS On the death of a member his executor or the person who is entitled under the law to succeed to