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 with the economic benefits of the investment.

Rights relating to meetings and control. A member has the right to receive notice of every general meeting (Section 101); to attend the meeting in person or through a proxy (Section 105); to speak and vote on resolutions, ordinarily one vote per equity share held (Section 47); and, where he holds the requisite percentage of paid-up share capital or voting power, to requisition an extraordinary general meeting (Section 100).

Rights relating to information. A member may inspect statutory registers such as the register of members and the register of charges (Section 94); receive a copy of the annual financial statements and the Board's report before the annual general meeting (Section 136); and inspect the minutes of general meetings (Section 119).

Rights relating to economic benefit. A member is entitled to receive dividend once declared by the company, in proportion to the amount paid up on the shares held (Section 123); to receive a share certificate as prima facie evidence of title (Section 46); and, on a winding up, to share in any surplus assets remaining after all liabilities are discharged, in proportion to his shareholding.

Rights of transfer and exit. Subject to any restriction in the articles, a member has the right to transfer his shares (Sections 44 and 56); and, for certain classes of preference shares, the right to have the shares redeemed under Section 55. …