Who is a Member of Company?
The members of a company are the persons who collectively constitute the company as a corporate entity. Section 2(55) of the companies Act, 2013 defines a member as:
1. The subscription to MOA of a company shall be deemed to have agreed to become members of the company and on its registration, shall be entered as members in its register of members.
2. Every other person who agrees in writing to become a member of a company and whose name is entered in the register of members shall be a member.
3. Every person holding equity share of a company and who name is entered ass beneficial owner in the records of the depository shall be deemed to be the member of the company.
Who can be a member in a company or Capacity of parties to become a member of a company:
Any person who is competent to contract may become the member of the company as per the provision of Memorandum and Articles of Association of the company. Provisions of the Companies Act, 2013 for various categories of person are given below:
1. Minor: If the company allots shares to a minor in ignorance of minority, following consequences shall follow:
i) The minor shall not be liable to pay any calls remaining unpaid on the shares held by him.
ii) The guardian cannot be compelled to pay the calls due on the shares held by a minor.
iii) The minor can repudiate the allotment made to him. The company can repudiate the allotment made to the minor. The minor shall be entitled to receive back the money paid by him.
iv) On attaining majority, the minor does not automatically become a member in a company.
v) If on attaining majority, the minor does anything which shows that he has accepted the membership, the minor shall be henceforth deemed to be a member.
2. Company: A company can become a member of any other company only if it is specifically authorized by the memorandum to purchase shares of any other company. A subsidiary company cannot become a member of its holding company (Sec. 19 of the Companies Act, 2013)
3. Co-operative Society and Society: A cooperative society is a legal person, and so it has power to hold property. Therefore, a cooperative society can become a member in a company. A society when registered under the Societies Registration Act, 1860 is a legal person, and so it can become a member in a company.
4. Trade union: A Trade Union registered under the Trade Unions Act, 1926 is legal person (i.e. a body corporate) capable of holding property. Therefore, a trade union can become a member in a company.
5. Partnership firm: A firm is not a legal person. It cannot hold property in its own name; the property is held in the name of the partners on behalf of the firm. Therefore, a firm cannot become a member in a company. However, a partnership firm may become a member in a company licensed u/s 8 of the Companies Act, 2013.
6. HUF: Hindu Undivided Family (HUF) is not a separate legal person. Therefore, an HUF cannot become a member in a company in its own name.
7. Trust: A trust is not a separate legal person. Therefore, the shares cannot be allotted or transferred in the name of a trust.
8. Joint holders: Two or more persons may hold the shares in a company in their joint names.
9. Foreigner: A foreigner can become a member in a company by complying with the requirements of Foreign Exchange Management Act, 1999. In case a war breaks out with foreign country, the foreigner cannot enforce any right available to the members.
10. Government: CG or SG can become a member in a body corporate.
11. Insolvent: The shares of the insolvent vest in the official assignee or the official receiver, as the case may be. However, an insolvent continues as a member until his shares are sold by the official assignee or the official receiver, as the case may be. Until an insolvent discharged, he cannot become a member.