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Unit 8: Membership in a Company

8.6 Rights of Members Notes

A member of a company has a number of rights vis-à-vis the company. These are conferred on
him either by the Act or, by the articles of the company. Some of the most important rights of a
member are:
To have the certificate of shares held ready for delivery to him within three months from
the date of allotment;
To have his name entered in the register of members if it had not been entered or has been
wrongly removed;
To transfer shares subject to the provisions of the Act and the articles;
To receive notices of meetings, to attend meetings and to vote thereat (either in person or
by proxy);
To inspect the register of members and register of debenture holders and get extracts
therefrom (s.163);

To obtain copies of memorandum and articles on request and payment of the prescribed
fees;
To have the first option to buy any new shares on a further issue of shares by the company
(s.81);
To participate in the election of directors and appointment of auditors;
To get a copy of the balance sheet and profit and loss account at least 21 days before the
annual general meeting;
To apply to the court to have any “variation of shareholders’ rights” set aside (s.106);
To nominate a person to whom his shares in the company shall vest in the event of his
death (s.109 A);
To obtain, on request, minutes of proceedings at general meetings (s.196);
To participate in the removal of directors by passing an ordinary resolution (s.284);

To petition to the court for prevention of mismanagement and oppression (s.399);
To petition to the court for an order of injunction restraining the directors from going
ahead with an ultra vires act;

To petition for compulsory winding up;
To participate in passing a special resolution for voluntary or compulsory winding up;
To participate in the surplus assets, if any, on the liquidation of the company.
To inspect the following registers: (a) of investments not held in company’s name (s. 49);
(b) of charges and copies of instruments creating charges (s. 144); (c) of members and index
thereof (s. 150 and s. 151); (d) of debenture holders and index thereof (s. 152); (e) of foreign
members (s. 158); (f) of contracts in which directors are interested (s. 301); (g) of directors
shareholdings (s. 307); of directors, managing director, manager, secretary (s. 303); of
loans and investments (s. 372A).

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