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Unit 8: Membership in a Company

inspection by members free of charge and by non-members on payment of one rupee for two Notes
hours a day during business hours.
A company may close the register at any time, by giving seven days’ previous notice, by an
advertisement in a newspaper circulating in the district in which the registered office of the
company is situated. However, the aggregate number of days for which it can be closed in a year
cannot exceed 45 days. Also, it cannot be closed for more than 30 days at a time.
Section 157 provides that a company with a share capital may, if authorised by its Articles, keep
in any country outside India a branch register of members resident there, called a Foreign
Register. The registrar must be informed of the place where this register is kept. The foreign
register is deemed part of the company’s principal register and must be maintained in the same
manner as the principal register.

Task The majority of the shareholders of a company passed a resolution to alter its
articles, and authorised the directors to require any shareholder to compulsorily transfer
shares of such shareholder competed with the company’s business. The plaintiff shareholder
who competed with the company’s business challenged the validity of the resolution.
Decide. [Hint: The resolution is valid; it being in the general interest of the company.]

8.8.2 Rectification of Register of Members

Section 111 provides for the rectification of the register of members by the CLB on an application
by any person aggrieved such as member, transferor, transferee, the company. The CLB may
order for rectification of the register: (i) where the name of any person is, without sufficient
cause, entered in or omitted from the register of members of a company; (ii) where default or
unnecessary delay occurs in entering on the register the fact that a person has ceased to be a
member of the company.
Where the CLB has ordered the rectification of the register, the rectification should be made and
notice of rectification must be filed with the Registrar within 30 days of the order of the CLB.

Self Assessment

5. Which of the given below members are not shareholders
(a) Minors (b) Insolvent
(c) Share warrant holders (d) All of the above
6. Which of the following is a right of the members of a company
(a) Right to have share (b) Right to Appoint Auditor

(c) Right to Appoint Director (d) All of the above
7. Which of the following is not a member of a company?
(a) Partnership firm (b) Foreigner

(c) Government (d) HUF
8. For quorum, the Joint holders will be collectively counted as how many members.
(a) 1 (b) 2
(c) 3 (d) 4

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