Membership of Company

Mode: Subscription to MoA; Brief Description: Automatic on registration; no application/allotment needed; subscriber cannot rescind even on ground of promoter's fraud (Metal Constituents Ltd., In re (1902) 1 Ch. 707).

Mode: Allotment of shares; Brief Description: Appropriation of shares by directors in favour of an applicant; member on entry of name.

Mode: Transfer of shares; Brief Description: Purchase from existing holder; applicant becomes member on registration of transfer.

Mode: Transmission of shares; Brief Description: Operation of law — on death, insolvency or lunacy of a member; surviving joint holder / legal heir steps in.

Mode: Membership by acquiescence / estoppel; Brief Description: Person who allows his name to remain on register or holds himself out as member is estopped from denying membership.

Mode: Joint membership; Brief Description: Two or more persons holding jointly — counted as a single member; first-named person is the lead for notice/dividend.

Mode: Beneficial owner in depository records; Brief Description: Demat holders under Sec. 2(55)(iii) — name in NSDL/CDSL register is sufficient.

Can Become Member?: Yes; Conditions / Remarks: Default rule — Sec. 11 of Indian Contract Act, 1872.