Meaning of a Member and the Register of Members

(a) Meaning of a Member and the Register of Members

Definition — Section 2(55), Companies Act, 2013. "Member", in relation to a company, means —

1. the subscriber to the memorandum of the company who shall be deemed to have agreed to become member of the company, and on its registration, shall be entered as member in its register of members;
2. every other person who agrees in writing to become a member of the company and whose name is entered in the register of members;
3. every person holding shares of the company and whose name is entered as a beneficial owner in the records of a depository. Three ideas fall directly out of this definition, and the syllabus tests each one:

1. A member is a person recognised in law as part of the corporate body itself — distinct from an employee (who has a contract of service, not membership), a creditor or debenture-holder (who has lent money to the company but has no ownership stake or voting right as such), and a director acting purely in that capacity (though a director is very often also a member).
2. Entry in the Register of Members is the operative fact of membership, not simply holding a share certificate or having applied for shares. Under Section 88 of the Act, every company must keep a Register of Members recording each member's name, address, the number and class of shares held, the date each person became (and, later, ceased to be) a member, and other prescribed particulars. A person's membership is legally proved by this register entry.
3. A subscriber to the Memorandum is treated as a member from the moment of incorporation itself — clause (i) makes this automatic, even before that person has been formally allotted any shares or issued a share certificate. This is the one route into membership that requires no separate act of "agreeing to become a member" beyond having signed the Memorandum in the first place. …