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Question
Justify the following statement.
Insolvent person ceases to be the Member of the company.
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Solution
A person having insufficient assets to meet debts and liabilities is called an insolvent. It is illegal for an insolvent person to enter into any contract or agreement with another person. When a member of a company is declared by the court of law as insolvent. His official receiver or assignee transfers his shares in favour of his creditor in settlement of his debts. On such transfer of shares, the membership of the insolvent member is terminated. Thus, an insolvent person ceases to be a member of the company.
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RELATED QUESTIONS
Select the correct answer from the options given below and rewrite the statement:
A person can be called as a Member when the name is entered in ________
Select the correct answer from the options given below and rewrite the statement:
When a person buys shares of a company by filling up an application form, the person becomes a member by _________.
Match the pairs:
| Group ‘A’ | Group ‘B’ |
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| d) Surrender of shares | 4) To get copies of Auditor’s, Directors’ Report, etc. |
| e) Right of Members | 5) Can be a Member |
| 6) To attend a board meeting | |
| 7) Duties of member | |
| 8) Surrendering all assets to the company | |
| 9) Demand or claim money from the company | |
| 10) Transfer of shares by order of Secretary |
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End of membership of a person.
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The subscribers of this document are considered as Members of the company.
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Buying shares is the most common way to become a Member of the company.
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Legal competency to enter into contracts is one of the criteria to become a member of the company.
State whether the following statement is True or False:
Limited Liability Partnership cannot be a member of the company
State whether the following statement is True or False:
Minor can be the member of the company
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Karta of HUF can be a member of the company.
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Select the correct option form the bracket.
| Group A | Group B |
| Co-operative | ___________ |
Select the correct option form the bracket.
| Group A | Group B |
| ___________ | Can hold shares in the name of partners |
Answer in one sentence:
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Transmission of Shares
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Justify the following statement.
Nominee of the member of OPC becomes its member of the death of the member.
Justify the following statement.
Members of the company have some fundamental corporate decision-making rights.
