Overview

Correspondence with Members — what this chapter actually covers

A member (shareholder) is one of a company's own owners, and the Companies Act, 2013 casts the Company Secretary as the officer who keeps the company's relationship with every member on a proper, written, and legally correct footing — from the day a person applies for shares to the day they receive a dividend on them. This chapter, which forms a core part of the Maharashtra HSC Secretarial Practice Std XII syllabus, studies exactly this correspondence: the letters a Secretary drafts to a member at each of the recurring occasions a company's dealings with its shareholders create.

This chapter follows directly from "Issue of Shares" (how shares are offered and applied for) and sits alongside "Deposits", "Correspondence with Debenture-holders" and "Correspondence with Depositors" — each studies the same kind of correspondence for a different class of stakeholder. "Dividend and Interest", later in the same syllabus, builds on the dividend-correspondence topic this chapter introduces.

Seven occasions are covered, in the order a member's relationship with the company naturally unfolds: (1) the meaning, importance and common occasions of correspondence with members; (2) the letter of allotment of shares; (3) the call letter demanding an unpaid call on shares; (4) the letter of regret for non-allotment, with refund of application money; (5) correspondence regarding bonus shares and rights shares; (6) correspondence regarding transfer and transmission of shares; and (7) correspondence regarding payment of dividend, including the statutory intimation on an unclaimed dividend and its transfer to the Investor Education and Protection Fund (IEPF). Specimen letters are given throughout — a Std XII Secretarial Practice examination regularly asks a student to draft one of these letters, not merely describe it, so the drafting skill matters as much as the company-law point it rests on.