Q.Define a 'member' of a company as per Section 2(55) of the Companies Act, 2013.

A member is not simply anyone who owns shares — the Companies Act, 2013 defines membership specifically in terms of entry in the company's own register.

Section 2(55) of the Companies Act, 2013 defines 'member', in relation to a company, as covering three distinct categories of persons.

First, every subscriber to the memorandum of association is deemed to have agreed to become a member and must be entered as a member in the register of members the moment the company is registered — no separate application or allotment is needed for this category, and membership of a company arises purely from the act of incorporation.

Second, every other person who agrees in writing to become a member of the company, and whose name is subsequently entered in the register of members, is a member. This is the ordinary route for later investors: a person applies for shares (or accepts a transfer), the company allots or registers the transfer, and only when the name is actually entered in the register does membership legally arise.

Third, every person holding shares of the company and whose name is entered as a beneficial owner in the records of a depository under the Depositories Act, 1996 is treated as a member, even though the depository itself is the entity formally registered in the company's own books.

The common thread across all three limbs is registration — either in the company's own register of members or, for dematerialised shares, in the depository's records. This is why membership of a company is treated in law as a matter of formal record, not merely of economic ownership: a person who has agreed to buy shares but whose name has not yet been entered anywhere is not yet a member.

Students often define a member simply as 'a person who holds shares', ignoring the requirement of registration in the register of members, and forget that a company limited by guarantee can have members even without any shares at all.