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MEMBERS, states that registered shareholders are entitled to, not a…
MEMBERS
Register
Section 18(2)
any person who agrees to become a member
and whose name is on the register of the members is a member of the company
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Section 50
All companies must keep a register of members, which must contain certain information in accordance
Names and addresses of the members, the numbers of shares held, the distinguishing number of the shares and the amount paid up on the shares
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Section 47 and 54
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must be kept for inspection by members or any other person in accordance with Section 48 and Section 55
Prima Facie Evidence
Section 101(1) stipulates that the entry of the name of a person in the register of members as shareholder is prima facie evidence that legal title to the shares is vested in that person.
Substantial Shareholder
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The disclosure obligation only applies to substantial shareholders in apublic listed or unlisted company, or a corporate body declared by the minister,subject to the disclosure obligation.
RIGHTS AND LIABILITIES
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Section 435
when a company is wound up, every present and past member shall be liable to contribute to the assets of the company to an amount sufficient for payment of its debts and liabilities, and costs, charges and expenses incurred of winding up the company
However, depends on the nature of the company.
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SHARE CERTIFICATE
Transfer of Shares
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Section 105(1)
. A shareholder may transfer all or any of his shares in the company through a duly executed and stamped instrument of transfer and the shareholder shall lodge the transfer with the company
Section 105(3)
company shall enter the name of the transferee in the register of members to give effect to the transfer
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Transmission of Shares
occurs by operation of law when the shares are inherited or bequeathed under a will upon death or bankruptcy of the original member
REMEDIES
Proper Plaintiff Rule
means that „it is only the company which can bring legal action and not any individual member even if the member is a majority
shareholder
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COMMON LAW RIGHTS
Personal Action
action is taken by a member personally against a company to enforce his personal rights as a member or shareholder of the company.
Representative Action
taken by one or few members of the same class to sue the company on behalf of themselves and other members of the same class
Derivative Action
taken by a shareholder who wants to enforce the company's rights against a person who has committed a wrong against the company.
STATUTORY REMEDIES
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Section 223 of CA 2016 – Approval of Company is Required by Directors of the Company's Undertaking for Disposal or Property
Section 228 of CA 2016 – Transactions with Directors, Substantial Shareholders or Connected Persons
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