Company Law: Membership
Membership and Control
There are several ways in which membership of a company may be acquired:
These are as follows:
i) By subscribing the Memorandum. When the company is registered, the persons who subscribed the memorandum automatically become members, and must be put on the Register of Members, though they are deemed to be members without such an entry and even without allotment.
ii) In the case of a director of a public company, by delivering a written undertaking to the Registrar to take and pay for his qualification shares. He becomes a member when the undertaking is delivered and is then in the same position as regards membership as a subscriber. (Sect. 181(2)
iii) By making an application under a prospectus or offer for sale for an allotment of shares.
iv) By taking a transfer from an existing member.
v) By succeeding to shares on the death or bankruptcy of a member.
The persons mentioned in (iii), (iv) and (v) above do not actually become members until their names are entered in the Register of Members. (Sect.26 (2).
Capacity
The question of capacity is governed by the general law of contract, and anyone who has the capacity to make a contract may become a member of a company. Certain special cases must be considered
Minors
A minor may be a member of a company unless the articles otherwise provide. Registration of a minor may give rise to difficulties in the case of partly-paid shares, because a minor can repudiate the contract with the company at any time during minority and for a reasonable time thereafter. If he does repudiate, he cannot recover the money he has paid up to the time of repudiation if the shares have ever had any value. (Steinberg v. Scala (Leeds) The Family Law Reform Act, 1969, Sect. 1 reduced the age of majority from 21 to 18 years, There is a general provision in the Act that a person attains a particular age, i.e. not only the age of majority, at the first moment of the relevant
There are several ways in which membership of a company may be acquired:
These are as follows:
i) By subscribing the Memorandum. When the company is registered, the persons who subscribed the memorandum automatically become members, and must be put on the Register of Members, though they are deemed to be members without such an entry and even without allotment.
ii) In the case of a director of a public company, by delivering a written undertaking to the Registrar to take and pay for his qualification shares. He becomes a member when the undertaking is delivered and is then in the same position as regards membership as a subscriber. (Sect. 181(2)
iii) By making an application under a prospectus or offer for sale for an allotment of shares.
iv) By taking a transfer from an existing member.
v) By succeeding to shares on the death or bankruptcy of a member.
The persons mentioned in (iii), (iv) and (v) above do not actually become members until their names are entered in the Register of Members. (Sect.26 (2).
Capacity
The question of capacity is governed by the general law of contract, and anyone who has the capacity to make a contract may become a member of a company. Certain special cases must be considered
Minors
A minor may be a member of a company unless the articles otherwise provide. Registration of a minor may give rise to difficulties in the case of partly-paid shares, because a minor can repudiate the contract with the company at any time during minority and for a reasonable time thereafter. If he does repudiate, he cannot recover the money he has paid up to the time of repudiation if the shares have ever had any value. (Steinberg v. Scala (Leeds) The Family Law Reform Act, 1969, Sect. 1 reduced the age of majority from 21 to 18 years, There is a general provision in the Act that a person attains a particular age, i.e. not only the age of majority, at the first moment of the relevant