MEMBERSHIP IN A COMPANY

 BY SUSHMA GOWDA

INTRODUCTION

Section 2(55) of the companies act 2013 provides the modes by which a person may acquire membership of a company.

• By subscribing to the memorandum,
• By agreeing in writing to become a member
• By holding Equity Share capital of a Company as beneficial owner in the records of the depository.

SECTION 88

In accordance with Section 88, every company shall keep register of its members. This register shall be kept at the registered office of the companies subject to the provisions of Section 94 of the companies act 2013.

PUBLIC COMPANY LIMITED BY SHARES

Every Member of a public company limited by shares, holding Equity shares, shall have votes in proportion to his share of the paid-up Equity share capital of the company. On the other hand, preference shareholders ordinarily vote only on matters directly relating to rights attached to preference share capital and no any resolution for winding up of the company or for the repayment or reduction of the Equity or preference share capital.

LEGAL REPRESENTATIVE OF DECEASED PERSON

Similarly, the Legal representative of the deceased member is not a member until the applies for registration.

He is however, a share holder even though his name does not appear in the register of members.

Thus, a person may be in possession of shares that he is a shareholder, but he may not be a member of a company.

DISSENTING MEMBER

Right attached to the share s of any class can be varied with consent in writing to the holders of not less than three-fourths of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of the holder of the issue shares of the class

If more than one person apply for share in a company and shares area allotted to them, each one of such applicant becomes a member.

INSOLVENT

Insolvency is the ability of a debtor to pay his debts. If a person a unable to pay his debts, he is said to be insolvent.

CESSATION OF MEMBERSHIP

A person ceases to be a member of a company when his name is removed from its register of members, which may occur in any of the following situation:

1. a) He transfers his shares to another person;
2. b) His shares are Forfeited
3. c) his shares are sold by the company to enforce a lien;
4. d) he dies;
5. e) He is adjudicated insolvent and the official Assignee disclaims his share.
6. f) His redeemable preference shares are redeemable
7. e) The Company is wound up.

CLOSING OF REGISTER OF MEMBERS

A company may close the register of members or the register of Debenture holders or the registers of others security holders for any periods or periods not exceeding thirty days at any one time, subject to giving of previous notice of at least 7 days or such lesser period as may be specified by securities and Exchange board for listed companies.