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Commercial Correspondence and Secretarial Practice · Class 12 Commerce

Ch 4Membership — Class 12 Commercial Correspondence and Secretarial Practice, concept-first.

Under the Companies Act, 2013, the word 'member' has a precise legal meaning that goes beyond simply holding a share certificate. Section 2(55) of the Act defines a member of a company as any of the following persons: (i) the subscriber to the memorandum of association of the company, who is deemed to have agreed to be…

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Key concepts

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Member and Shareholder

A member is the person the Companies Act, 2013 recognises as such under Section 2(55) — a subscriber to the memorandum, a person entered in the register of members after agreeing in writing, or a registered beneficial ow…

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Chapter contents

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1

Meaning and Definition of a Member

Under the Companies Act, 2013, the word 'member' has a precise legal meaning that goes beyond simply holding a share certificate.

2

Member and Shareholder — The Distinction

In everyday commercial language the words 'member' and 'shareholder' are used interchangeably, and in the vast majority of companies — those limited by shares — every shareholder is indeed a member an…

3

Who Can Become a Member — Eligibility

Not every person or entity is automatically capable of becoming a member of a company. The Companies Act, 2013 and the general law of contract together decide who may validly hold membership.

4

Modes of Acquiring Membership

The Companies Act, 2013 recognises several distinct routes by which a person may acquire membership of a company. Each route has its own legal mechanics.

5

Rights of Members

Membership of a company confers a bundle of statutory and contractual rights under the Companies Act, 2013, broadly divisible into rights connected with control and participation, and rights connected…

6

Duties and Liabilities of Members

Membership is not a one-sided bundle of rights; the Companies Act, 2013 and a company's own memorandum and articles impose corresponding duties and liabilities.

7

Cessation of Membership

Membership of a company, once acquired, does not last forever; the Companies Act, 2013 and general company law recognise a number of distinct ways in which a person ceases to be a member.

8

The Register of Members

Section 88 of the Companies Act, 2013 requires every company to keep and maintain a register of members from the date of its registration.

Exercises

+Show 13 questions13 questions
  1. Q1Define a 'member' of a company as per Section 2(55) of the Companies Act, 2013.Free
  2. Q2State the distinction between a 'member' and a 'shareholder' of a company.Free
  3. Q3"Every shareholder is a member, but every member need not be a shareholder." Explain this statement.Free
  4. Q4Can a minor be admitted as a member of a company? Discuss with reference to the Companies Act, 2013.Preview
  5. Q5Can a partnership firm become a member of a company? Give reasons for your answer.Preview
  6. Q6Discuss whether the following can become members of a company: (a) a company, (b) a Hindu Undivided Family (HUF), (c) an insolvent person, a…Preview
  7. Q7Explain the various modes by which a person can acquire membership of a company.Preview
  8. Q8Distinguish between membership acquired by subscription to the memorandum and membership acquired by transfer of shares.Preview
  9. Q9What do you mean by 'membership by transmission of shares'? How is it different from transfer of shares?Preview
  10. Q10State any five rights available to a member of a company under the Companies Act, 2013.Preview
  11. Q11Explain the duties and liabilities of a member of a company.Preview
  12. Q12Explain the various modes by which the membership of a company may come to an end.Preview
  13. Q13What is the 'Register of Members'? State its importance under the Companies Act, 2013.Preview

Sample & Board Papers

Sample papers and previous-year board questions for this subject.

+Show 20 questions20 questions
  1. Q1Fire brigade service is called which of the following services? (a) Private (b) Public (c) Government (d) Semi-governmentPreview
  2. Q2In which insurance policy an insured get protection to meet the expenses of treatment / drugs/ surgery during his own sickness? (a) Whole li…Preview
  3. Q3Personality of the company is ______ . (a) combined (b) individual (c) artificial (d) has no personalityPreview
  4. Q4For which issues do business firms normally need to communicate in government departments?Preview
  5. Q5Under what circumstances can a subsidiary company acquire membership of holding company?Preview
  6. Q6Differentiate between member and shareholder.Preview
  7. Q7Who can acquire membership?Preview
  8. Q8The water supply in your area is irregular. Draft a complaint letter to the concerned department regarding irregular water supply.Preview
  9. Q9Draft an appreciation and thanks giving letter to the Health Department of your city for Corona Vaccination drive in your school.Preview
  10. Q1035 year old Shri. Dilipbhai Joshi works on a higher position since last 2 years in a private company. He wishes to protect his family member…Preview
  11. Q11Which clause of Memorandum of Association is to be signed to be considered as member? (a) (A) Capital clause (b) (B) Objective clause (c) (C…Preview
  12. Q12With whom will the company communicate in case of joint shareholding? (a) (A) With the first shareholder (b) (B) With all the shareholders (…Preview
  13. Q13Why is it necessary to close the Register of Members during the procedure of making share call?Preview
  14. Q14Write any 2 differences between Member and Shareholder.Preview
  15. Q15"A person may be member but may not be a shareholder." Explain.Preview
  16. Q16Who can acquire membership?Preview
  17. Q17Members of a partnership firm may acquire membership of company _____. (a) (A) can be member (b) (B) firm and partners can be member jointly…Preview
  18. Q18Shares that are given as consideration to the service provider to the company _____. (a) (A) do not acquire membership (b) (B) are offered p…Preview
  19. Q19Under what circumstances can a subsidiary company acquire membership of holding company?Preview
  20. Q20Explain methods to obtain membership.Preview