Advertisements
Advertisements
Question
Justify the following statement.
Member and Shareholder are interchangeable terms.
Advertisements
Solution
(1) According to the procedure under the Company Law, the name of a person who has been allotted shares (Le. a shareholder) has to be entered in the Register of Members. Thus, he becomes a member of the company. It is for this reason that the two terms ‘member’ and ‘shareholder’ are interchangeably used to mean the same person. However, this is true in the case of (i) a company limited by shares, (ii) a company limited by guarantee and having a share capital, and (iii) an unlimited company having a share capital.
(2) But in the case of a company limited by guarantee without share capital and an unlimited company without share capital, a member is not a shareholder. Thus, a member may or may not be a shareholder and Vice versa. A person who subscribes to the Memorandum of Association may not have been allotted any shares. He is a member but not a shareholder. A shareholder who has transferred his shares ceases to be a shareholder but continues to be a member till the transfer 15 registered. Thus, a person may be a member without being a shareholder, or he may be a shareholder without being a member.
APPEARS IN
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:
A _______ cannot be a member of a company.
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 _________.
Select the correct answer from the options given below and rewrite the statement:
A member has the right to participate in General Meetings means, he has a right to ________
Write a word or a term or a phrase which can substitute the following statement:
End of membership of a person.
Write a word or a term or a phrase which can substitute the following statement:
Book in which names of all members are entered.
Write a word or a term or a phrase which can substitute the following statement:
Becoming a member of a company.
State whether the following statement is True or False:
Buying shares is the most common way to become a Member of the company.
State whether the following statement is True or False:
Both, individuals and body corporate can be members 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:
Karta of HUF can be a member of the company.
State whether the following statement is True or False:
Member of the company is conferred with several rights.
Complete the sentence:
A person whose name is entered in the Register of Members of a company is called __________
Complete the sentence:
Members have a right to appoint and remove the __________
Select the correct option form the bracket.
| Group A | Group B |
| Co-operative | ___________ |
Answer in one sentence:
Which individuals cannot become a member of a company?
Answer in one sentence:
What is the common way of becoming a member of a company?
Explain the following Term/Concept.
Transmission of Shares
