A member is a person who has allowed his name to be listed in the membership register or who owns a share of any company. You should be competent to enter into contracts in order to qualify for membership.
There is a misconception about attainment of membership of any company (Co) and who a member is. Are you also in this situation? Majority of people perceive that a person who holds the shares of a company is a member. But this is not hundred percent true because a person may be a holder of shares but she is not a member.
A member is a person who has allowed his name to be listed in the membership register. You should be competent to enter into contracts in order to qualify for membership. Here are ways of acquiring membership:
1. Subscribers to the memorandum of association become original members of a company from the date of its incorporation. If you subscribe to it,
then you become a member. You won’t be required to apply for allotment and entry of your name in the register of members.
2. If you agree to purchase qualified shares or be appointed as the first director of a public company, then you attain membership.
3. When you apply for shares and you are allotted the shares, then you can get your name listed in the register of membership. By getting your name on the register, you acquire membership.
4. Shares of a public company are freely transferable. When you purchase shares from a person in the open market and get them transferred to you through the execution of an instrument termed as share transfer form, then the transferors name is deleted from the register of membership and your name entered in it. This means that you acquired membership through transfer of shares.
5. You can attain membership by succession. You can inherit the shares of the deceased, insane or insolvent member by only producing legal evidence of her entitlement and get your name listed in the register of membership.
6. You can become a member by converting your share warrants into share certificates. When you request for the conversion and it’s accepted, then you can get your name listed in the register of membership.
7. When you obtain allotment of shares for a consideration other than cash, then you attain membership if only you get your name listed in the register of membership. This happens if you accept shares for the services you rendered to the company or properties you had sold to it.
8. You can be a member through an order of the court. Your name can be listed in the register of membership as per the order of the court.
9. In case an existing equity share holder renounces her right shares to you as her nominee, then you can get your name listed in the register of membership.
10. If you hold debentures and you apply to the company to convert them into shares and the application is accepted, then you become a member of that company after only getting your name listed in the register of membership.
11. Lastly, you can attain membership through acquiescence or estoppel. This happens when you knowingly allow your name to remain in the register of members even after you have disposed of your shares or hold yourself as a member by making others believe that you are a member. You’ll be estopped from denying the fact that you are a member thus you become responsible for the liabilities of membership.
