What is Company?
Section 2(7) define company as:
“Company means a company formed and registered
Under the Company Ordinance or an existing company”
Membership in Company:
Membership of a company and an organization is the state of being member of it.
A company while being unnatural legal person is comprise assertive person who found it as assembled body. Such persons who comprise the company are the member of the company. According the rule of law only those persons considered the members of company who are registered in company’s membership. A person who is not register in members of company even he is purchaser of shares,not consider as a member. But the seller, granting sales of shares, stay in members of company.
According to Companies Ordinance the terms member and shareholder are totally different. For being member of company its important that he must register with that company but for shareholder registration is not important.
- In certain stages a person might be a shareholder but not a member.
- A legal evocative of late shareholder is the shareholder alike he is register or not.
- A person who have share authority is shareholder but not a member.
- A person become a shareholder when company allotted shares to him.
- In other situation a person may be a member but not a shareholder.
- When name of any shareholder is wrongly missed out from the registration, is still a member.
- A shareholder who transfer his shares to others is member of company unless until his account not to be closed.
- In unlimited company there is no shareholder its only have members.
Who is able to become a member:
Capability to become member.
- Insolvent……not capable
- Trade Union…….capable
- Company……not capable
Procedure to Become a Part (member) of a Company:
A person who registered in company’s members is a member, members of Limited Company are its shareholders.
- Under Section 2(21) the members are:
- The transferee of shares when his name registered in company’s members.
- A company limited by guarantee having no share capital, a person agreed to become a member and also register in members of company
- A company having share capital its members are
- A person who is register and shares allotted to him.
- A subscriber to the memorandum.
Conditions of Membership:
Following conditions are important for members of company.
- Sign Up Memorandum.
A person who enroll in the memorandum is agreed to become a part(member) of a company. The name of enrolled person will enter in memorandum registration.
A person become a member by making application for engagement when company allotted shares to him and register his name as member.
Any legal presentational of late or insolvent shareholder have authority to hold shares.
- Written Agreement.
A person can become a member if he fulfill following conditions.
- A consent to become a member must be in written form not in oral form.
- Name of desire person must be register.
Transferee can be a member of a company.
Number of Members:
Every company requirement for number of members is different. The requirements of number of members for Private Company, Public Company and One man company are changed.
- Private Company.
The minimum members required in private company is only one and the maximum number of members is between from 1 to 50.
- Public Company.
In public / non-listed company there is no limit for maximum number of members and minimum number of members is three. But if company issued 10,000 shares its members can be 10,000.
- One Man Company.
In OMC there is minimum number of members required is 1 and maximum is 1 to 50.
Windup of Membership:
A member can be terminated when his name is legally dropped from registration of member because of valid reason.
- By the following ways a person may cease to be a member.
- When the company is being wound up.
- When he sell out all his shares.
- When he dies and all his shares are registered in the name of his legal supporter.
- When he declare insolvent.
- When shares redeem back.