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Justify the following statement. Transfer of shares results in termination of membership. - Secretarial Practice

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Question

Justify the following statement.

Transfer of shares results in termination of membership.

Short/Brief Note
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Solution

(1) Transfer of shares refers to the passing of ownership and possession of shares from a shareholder to another person by way of sale or gift. The shares cannot be transferred by mere delivery.

(2) The transfer of shares is affected by registering an instrument called ‘Instrument of Transfer’ with the company. When the company approves of the transfer, the Secretary strikes off (cancels) the name of the seller (transferor) from the Register of Members, and thus the membership of the shareholder who has transferred the shares is terminated.

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Members of a Company
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Chapter 5: Members of a company - Exercise Q.5 [Page 75]

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Balbharati Secretarial Practice [English] 11 Standard Maharashtra State Board
Chapter 5 Members of a company
Exercise Q.5 | Q 9 | Page 75

RELATED QUESTIONS

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 ________


Match the pairs:

Group ‘A’ Group ‘B’
a) Insane person 1) Transfer of shares by operation of law
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  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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