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Member and Share holder

Somaas Kandan (CA Final) (385 Points)

06 December 2010

What is the difference between Member and Share holder of a company?

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6 Replies

Ajay Mishra (Company Secretary) (74342 Points)
Replied 07 December 2010

In Companies Act, both are same.

Regards

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Syam kamal (Company Secretary) (156 Points)
Replied 08 December 2010

There are some technical differences between a member and shareholder under the Companies Act, 1956

A person who subscribes to the memorandum of association immediately becomes the member even though no shares are allotted to him. In case shares are not allotted to the subscriber, he is a member but not shareholder of the company

A person who acquires the shares in the open market may be a shareholder but he does not become the member automatically. It is only when the name of the transferee is entered in the register of members that he becomes the member. Until then he is just a shareholder and not a member

In case of company limited by guarantee having no share capital or unlimited company having no share capital there will be only members and no shareholders

Holder of a share warrant is a shareholder of the company but not a member as his name is struck off the register of members

Shridhi Jain (Company Secretary) (1678 Points)
Replied 08 December 2010

Simple difference is that person whose name is appearing in the register of members is member of the company while the person who is holding the shares of the company is shareholder of the company.

Generally both the persons are same.

Regards,

Shridhi jain

Ajay Mishra (Company Secretary) (74342 Points)
Replied 09 December 2010

Dear Syam Kamal

Subscriber will also be treated a member as well as shareholders.

A subscriber to memorandum of association is deemed to have agreed to become a shareholder, even if he submit no application and no allotment of shares is made to him. [Collector of Moradabad v. Equity Insurance Co. Ltd. (1948)]

A person subscribing to the Memorandum shall become a member of the company on its incorporation and remains so till the company accepts his surrender of shares or transfer shares. [U.P. Oil Mills Co. Ltd. In Re (1931)].

Regards

Cs Ajay Mishra

Syam kamal (Company Secretary) (156 Points)
Replied 09 December 2010

Originally posted by : Ajay Mishra
	Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} Dear Syam Kamal Subscriber will also be treated a member as well as shareholders. A subscriber to memorandum of association is deemed to have agreed to become a shareholder, even if he submit no application and no allotment of shares is made to him. [Collector of Moradabad v. Equity Insurance Co. Ltd. (1948)] A person subscribing to the Memorandum shall become a member of the company on its incorporation and remains so till the company accepts his surrender of shares or transfer shares. [U.P. Oil Mills Co. Ltd. In Re (1931)]. Regards Cs Ajay Mishra