Module 4 – Administration of companies
1Q. what are the different ways of getting membership
of a company ?
Ans : 1. Membership by subscription : every subscriber
to the MOA is deemed to have agreed to become the
member of the company
2. Membership by application & allotment : a
person may become a member of a company by an
application for shares and its subsequent acceptance .
3. Membership by transfer : a person may
purchase shares in the open market . he becomes a
member when his name is entered in the register of
members .
4. Membership by succession : a deceased
member ( he is dead) continues to be the member of the
company as long as his name appears in the register of
members . his legal representative is entitled to have his
name entered in the register of members .
5. Membership by benefical ownership : every
person holding equity share capital of a company and
whose name is entered as benefical owner in the record
shall be deemed to be a member of his concerned
company .
6. Membership by qualification of shares : the
director must take or sign an undertaking and pay for
qualification of shares . when he takes qualification of
shares he becomes a member .
, 2Q: Who all are exempted from becoming the members
of the company ?
a) Minor : a minor is not competent to contract and
therefore a contract with a minor is void .
b) Insolvent : an insolvent cannot become a member
of a company , but if a member become an
insolvent , he remains a member as long as his
name appear in the register.
c) Partnership firm :a firm is not a person and as such
it cannot be entered as a member in the register of
members .
d) Foreigner : foreigner can become a member only
when he get permission of the reserve bank of india
under the foreign exchange management act . the
right of the foreigner as a member will be
suspended if he becomes an alien enemy .
e) Company : a company cannot be a member of
itself . it can only become a member of another
company .
3Q: What are the rights and liabilities of members?
Rights of the members
1) Right to receive notice of general meeting of the
company
2) Right to receive the report of the cost auditor
3) Right to inspect and get copies of registers and
returns
4) Right to attend meeting of shareholders and
exercise voting right
5) Right to receive dividend
1Q. what are the different ways of getting membership
of a company ?
Ans : 1. Membership by subscription : every subscriber
to the MOA is deemed to have agreed to become the
member of the company
2. Membership by application & allotment : a
person may become a member of a company by an
application for shares and its subsequent acceptance .
3. Membership by transfer : a person may
purchase shares in the open market . he becomes a
member when his name is entered in the register of
members .
4. Membership by succession : a deceased
member ( he is dead) continues to be the member of the
company as long as his name appears in the register of
members . his legal representative is entitled to have his
name entered in the register of members .
5. Membership by benefical ownership : every
person holding equity share capital of a company and
whose name is entered as benefical owner in the record
shall be deemed to be a member of his concerned
company .
6. Membership by qualification of shares : the
director must take or sign an undertaking and pay for
qualification of shares . when he takes qualification of
shares he becomes a member .
, 2Q: Who all are exempted from becoming the members
of the company ?
a) Minor : a minor is not competent to contract and
therefore a contract with a minor is void .
b) Insolvent : an insolvent cannot become a member
of a company , but if a member become an
insolvent , he remains a member as long as his
name appear in the register.
c) Partnership firm :a firm is not a person and as such
it cannot be entered as a member in the register of
members .
d) Foreigner : foreigner can become a member only
when he get permission of the reserve bank of india
under the foreign exchange management act . the
right of the foreigner as a member will be
suspended if he becomes an alien enemy .
e) Company : a company cannot be a member of
itself . it can only become a member of another
company .
3Q: What are the rights and liabilities of members?
Rights of the members
1) Right to receive notice of general meeting of the
company
2) Right to receive the report of the cost auditor
3) Right to inspect and get copies of registers and
returns
4) Right to attend meeting of shareholders and
exercise voting right
5) Right to receive dividend
