Membership of the company:- A person whose name appears in the Register of Members is a member of the company. Section 41 of the Companies Act 1956 define a member as under:-

1) The subscribers of the memorandum of the company shall be deemed to have agreed to become members of the company and on its registration shall be entered as members in the Register of Members.

2) Every other person who agrees in writing to become a member of a company and whose name is entered in its Register of Members.

3) Every other person who agrees in writing to become a member of the company and whose name is entered in its Register of Members shall be a member of the company.

From the time, a person becomes a member of the company. He is entitled to exercise and enjoy the right conferred by the Act. A legal representative of a deceased shareholder is not a member until he products a legal proof of his title to the shares and register himself as a member.

Ways of Acquiring Membership:

Membership in a joint stock company can be required is one of the following ways:

1) As a signatory to the memorandum of association at the time of the incorporation of the company.

2) By applying for shares and securing the allotment from the company.

3) Acting as a renounce or nominee by way of transmission of the shares on account of death, insolvency of a shareholder.

4) Having exchanged the share warrant into the share certificate.

5) Having purchased a qualification share for becoming the directors of the company.

Right and Privilege of member:

The shareholder of public limited companies enjoy a number of right and privileges under the provision of Act

1) Members are entitled to receive one or several share certificates within three allotments or registration of transfer of share.

2) Members have the right to make an appeal to the Central Govt. If the company refuses to register the transfer of shares.

3) Members are entitled to received notice containing the agenda of general meetings of the company

4) They have a right to inspect and taan key extract from any register or index numbers of the company

5) Equity shareholders have the right to purchase the share of further issue of capital by the company.

6) They have the right to elect directors in the Annual General Meeting and they have the right to remove them before the expiry of their period of office.

7) They have the right to appoint auditors and fix their remuneration and they may remove them from the offices.

8) They have the right to receive copies of the balance-sheet for relief in the event of oppression or mismanagement.

9) They have the right to make an application to the court for relief in the event of oppression of mismanagement.

10) They have the right to vote in favor or against the declaration of dividend and to the received dividend as also a right to share the surplus assets at the time of winding up of the company.

11) They have a right to get a duplicate share certificate on account of the original share-certificate being lost or destroyed.

12) They have a right to receive the copies of memorandum statutory report, share registers, minutes of the General Meetings, registered contract etc.

Termination of membership

Membership is terminated when a person’s name is removed from the register of members for some proper reason. This may occur when:

a) He transfers all of his shares;

b) His shares are forfeited, surrendered or sold to enforce a lien;

c) He holds redeemable preference shares and they are redeemed;

d) He dies and his legal representative transfers the shares or secures their registration in his own name

e) His contract to take the shares is rescinded or repudiated;

f) He becomes insolvent and the official assignee or receiver disclaims the shares or transfers them; and

g) The shares are held by the company in the course of liquidation, and the liquidator disclaims the shares or transfers them.