II. Share Holders

Shareholders’ acquisition of membership

  1. Membership by Subscribing to Memorandum
  1. Membership by Qualification shares
  1. Membership by Application and Allotment
  1. Membership by Transfer
  1. Membership by Transmission
  1. Membership by Estoppel

Duties of a Shareholder:

(a) Sign the memorandum and take the shares stated for payment directly from the company

(b) Accept allotted shares and pay for them as per the terms of the issue

(c) Make payments for valid calls when requested

(d) Follow decisions made by the majority of members, except if they are acting maliciously or fraudulently

(e) Contribute to company assets in the event of liquidation.

Liability of Company Members

Company Ltd by Shares: member's liability = unpaid share amount.

Company Ltd by Guarantee: member's liability = agreed contribution in winding up.

Company with Unltd Liability: every member liable for all debts contracted during membership.

Members' Rights

A. Statutory Rights

  1. balance sheets,
  1. auditor's report,
  1. contracts,
  1. notice of meetings
  1. They can also inspect registers
  1. apply to call meetings
  1. attend AGMs
  1. appoint proxies
  1. transfer shares
  1. receive dividends,
  1. participate in appointments
  1. participate in winding-up process.

B. Documentary Rights: Rights given in the MOA & AOA

C. Legal Rights: Rights given by the general law.

Share Certificate: section 84- A share certificate is a certificate issued by the company under its common seal specifying the share held by any member. It is an evidence of the title of the allottee or transferee of shares.

Share warrant: bearer document issued by the company under the common seal of the company stating that the bearer is entitled to the shares mentioned therein.