Q.State the modes by which a person can acquire membership of a company.

A service provider who is allotted shares as consideration becomes a shareholder and therefore acquires membership — the correct option is (C).

When a company allots shares to a person as consideration for services rendered (for example sweat equity or shares issued for value received other than cash), those are genuine shares registered in the person's name. Once the name is entered in the register of members, the person becomes a member with the usual rights of a shareholder.

• Such a person does not merely become a manager, nor does he get only partial membership — he acquires full membership.

Signing the subscription (association) clause of the Memorandum makes a person a member — option (C).

The Memorandum of Association contains several clauses (name, registered office/situation, objects, liability, capital and subscription/association). The subscription clause is where the signatories declare their desire to form the company and agree to take at least one share each. By signing this clause, the subscribers automatically become the first members of the company. The capital, objective and liability clauses deal with other matters and do not, by signature, confer membership. Hence (C).