MEMBERS & SHAREHOLDERS

What is a Member?

A member of a company is a person or corporate body who owns all or part of a company or is a trustee of the company. participates in the capital of a company, is registered as such and is entitled to certain rights.

The subscribers to the constitution of a company shall be deemed to have agreed to become members of the company, and, on the incorporation of the company, shall be entered as members in its register of members as the first members of the company.

Every other person who agrees to become a member of a company, and whose name is entered in its register of members, shall be a member of the company.

What is a Shareholder?

A shareholder is a person or corporate body who has applied and are allotted and issued at least one share in the capital of a company and their name has been entered into the Register of Members. it should be noted that a person who purchases shares in a company, while being a shareholder from the date of purchase, will not become a member of the company until their name is entered into the register of members.

Rights of Members

The constitution of a company should set out what the rights of the members are. A company may create a different class of members or have different share classes to provide for different rights. The rights of members should be reviewed before any change in the corporate structure is made.

The typical rights of members include:

• Attend and vote at general meetings
• A proportion of the profits of a company – dividend
• The capital surplus on winding up
• Right to notice & information from Company

Register of Members

Every company is obliged to keep a register of its members. The register must be kept at a place within the State which can be one of the following; the registered office of the company, its principal place of business or another place. If the register is not kept at the company’s registered office, the company is required to notify the Registrar of Companies where the register is kept and of any change in that place.

The register is open to inspection to every member free of charge and to any member of the public on payment of the relevant fee.

The Register of Members contains certain information on each member of the company and it should be noted that it only records the registered members or shareholders and not the beneficial owners.

Register of Beneficial Owners

All corporate and legal entities must hold adequate, accurate and current information on their beneficial owner(s) in their own beneficial ownership register.

These entities will in due course be required to file this information with a central beneficial ownership register which will be maintained by the Companies Registration Office.

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Please Note:

Our CLS Insights aims to bring you practical information and news on Company Law and Company Secretarial. We cover the topics that matter to your business and give practical tips and also the benefit our experiences. Please remember this article is a guide and legal advice should always be obtained. If you have any queries please contact one of the team and we would be happy to help.