5 Questions
How can someone become a member of a company?
By applying and being approved by the company
Who can become a member of a company?
Any person who applies and is approved by the company
What are the rights of a member of a company?
Rights to share in assets of a company
What are the liabilities of a member of a company?
Unlimited liability for the company's debts
How can membership in a company be terminated?
By operation of law
Study Notes
Membership in a Company
- Anyone can become a member of a company by buying or subscribing to its shares, either during the initial public offering (IPO) or subsequently through a stock exchange.
- Any type of person or entity can become a member of a company, including individuals, organizations, and other companies.
Rights of a Member
- Members have the right to receive a copy of the company's annual report and financial statements.
- Members have the right to attend and vote at the company's annual general meeting (AGM) and any extraordinary general meeting (EGM).
- Members are entitled to participate in the company's profits through dividends, if declared.
- Members can inspect the company's statutory registers and minutes of general meetings.
Liabilities of a Member
- The liability of a member is limited to the amount unpaid on their shares in a limited liability company.
- Members are not personally liable for the company's debts or obligations beyond the amount invested.
Termination of Membership
- Membership in a company can be terminated by transferring or selling one's shares to another person.
- A member may cease to be a member due to the death of an individual or the winding up or liquidation of a corporate entity.
- A company can terminate a member's membership through a compromise or arrangement under the Companies Act.
Test your knowledge on membership in a company with this quiz! Learn about the rights and responsibilities of being a member, the registration process, and the powers delegated to directors. Challenge yourself and see how well you understand the role of a company member.
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