Question

Write Short notes on the following:
Individual rights of members.

Answer 1

Section 41 of Companies Act, 1956 talks about who can become a member:

(1) The subscribers of the memorandum of a company shall be deemed to have agreed to become members of the

company, and on its registration, shall be entered as members in its register of members.

(2) Every other person who agrees in writing to become a member of a company and whose name is entered in its

register of members, shall be a member of the company.

(3) Every person holding equity share capital of company and whose name is entered as beneficial owner in the

records of the depository shall be deemed to be a member of the concerned company.

Following are some rights or powers that the members have:

• Transfer of Shares
  
• Dividend and Distribution of the shares
  
• Shareholders Pre-emption Rights
  
• Right to Participate in a Winding-Up of a company
  
• Rights Regarding Members’ Meetings
  
• Members’ Right to Information
  
• Members’ Powers where the Company is in Default
  
• Right of Members to Apply for the Restoration of a Company
  
• Members’ Right to Seek an Investigation of a Company
  
• Right to Petition for the Winding-up of a Company
  
• Right to Petition for Relief in Cases of Oppression