members

All persons who are competent to contract may, in general, become members of a company. There are, however, some special considera­tions to which reference must be made.

A society registered under the Society registration Act, I860, is competent to hold shares in a company in its own name, if it is so authorized by its memorandum or articles of association.

A person may cease to be a member of a company, at any time, one of the following ways:

(1) When he transfers his shares and the transfer is duly registered in the books of the company.

ADVERTISEMENTS:

(2) By forfeiture of shares for non-payment of calls, if articles so provide.

(3) By a valid surrender of shares. It is a short cut to forfeiture as it involves no legal formalities.

(4) When the company sells the shares, in exercise of its right or line over them, by giving a 14 days notice to a debtor shareholder.

(5) When a shareholder dies and his shares stand transmitted to his legal representative, upon registration of the share;, in the succes­sor’s name.

(6) When he is declared insolvent and the Official Assignee dis­claims the shares under his right of ‘disclaimer of onerous properly.’

(7) By repudiating the contract of membership on the ground of misrepresentation in the prospectus or on the ground of irregular allotment.

(8) By conversion of share certificate into share warrant, unless the articles provide otherwise. In this case one ceases to be a ‘member’ in the strict sense of the term, that is, his name being removed from the Register of Members, although he continues to be a shareholder of the company.