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प्रश्न
Answer the following question:
Explain the circumstances when Member is not a shareholder and vice-versa.
उत्तर
(A) Member without being a shareholder: Although the terms ‘member’ and ‘shareholder’ are used interchangeably and mean the same person, in the following circumstances member is not a shareholder:
(1) Signatories to the Memorandum of Association: Sometimes, a person who subscribes to the Memorandum of Association may not have been allotted any shares. In that case, until he is allotted any share, he is not called a shareholder of the company.
(2) Company Limited by Guarantee Amount: In the case of a company limited by guarantee having no share capital or an unlimited company having no share capital, there will be only members but no shareholders.
(3) Membership by Acquiescence/Estoppel: If a person’s name is improperly entered in the Register of Members and the exercises rights of membership such as attending company meetings, accepting dividends, etc. and does not take any step to remove his name from the Register of Members. In this case, he is a member but not a shareholder. So, he is estoppel from denying this fact so as to disown his liability as a member.
(4) Transfer of shares: The shareholder who has transferred his shares to another person ceases to be a shareholder but continues to be a member till the transfer is registered and the name of the transferee is recorded in the Register of Members.
(5) Transmission of shares: In the event of death or lunacy of a member, his legal heir or representative automatically becomes the shareholder. He is entitled to have his name entered in the Register of Members. He can do so by making an application to the company supported by legal evidence of his title. The deceased person ceases to be a shareholder but continues to be a member of the company until the transmission of shares is completed (effected).
(6) On Insolvency of a Member: Though shares of the insolvent member are taken possession by (held) by the Official Receiver or Assignee appointed by the court. An insolvent member continues to be a member but not a shareholder of the company.
(B) Shareholder without being a Member: As explained above the transferee. i.e. buyer of the shares, legal heir representative in the case of death of a member. The official receiver or assignee in the case of insolvency of members are the shareholders but not the member of the company.
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संबंधित प्रश्न
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:
____________ means a person ceases being a member of the company of membership.
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:
The subscribers of this document are considered as Members 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:
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:
Members of the company can attend general and Board meetings of the company.
State whether the following statement is True or False:
Minor can be the member of the company
State whether the following statement is True or False:
Member of the company is conferred with several rights.
State whether the following statement is True or False:
Member is entitled to profits of the company when a dividend is declared.
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 |
| Minor | ___________ |
Select the correct option form the bracket.
| Group A | Group B |
| ___________ | Can hold shares in the name of partners |
Correct the underlined word and rewrite the following sentence:
A Minor can be a member of a company.
Correct the underlined word and rewrite the following sentence:
Partnership Firm can be a member of a company.
Explain the following Term/Concept.
Transmission of Shares
Justify the following statement.
Member and Shareholder are interchangeable terms.
Justify the following statement.
Members of the company have some fundamental corporate decision-making rights.
