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How would you define member of Section 8 company and their purpose?

:) Nitin (Beginner Consultant) (5 Points)

22 July 2021  

Most of the associations and chambers registered under section 8 invite professional or general public to become members by charging a fixed fees in such case my questions are -

  1. Do such members act as shareholders of the company?
  2. Do such members have legal obligations with MCA in future?
  3. Do such members can vote for directors elections?
  4. Can such members choose or vote for a leader (to act as catalyst or to be included in committee of association) from themselves?
  5. Do such members can be obstacle while amalgamation with another section 8 or merging into another entity?
  6. Can company directly cancel membership of such members in case of dispute or breach of regulations?

Please enlighten.

Warm Regards,

Nitin


 2 Replies

CS Divesh Goyal (Practicing Compnay Secretary)   (42970 Points)
Replied 23 July 2021

First, we have to check they are distributing membership or they are making them shareholder.

:) Nitin (Beginner Consultant) (5 Points)
Replied 23 July 2021

They are distributing membership but not making them shareholder, I think that those fees might be entry fees not the sum of shares to purchase, because generally these associations exceeds 200 members and there are no provisions of returns. See for example a XYZ Chamber of Commerce have Entrepreneurs Wing in which they invite entrepreneurs to become their member with options of Elite, Premium and Patron. I want to know if these members are authorized members of company?

In such case, can member participate in voting? If Yes, then under which section you define such members?


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