Rights and liability of members of a company.

rights of company members

The rights of the Company members may be commented in the following three sections-

(1) Legal rights – Such rights are covered by this class which are organised by members of the Company under general law, for example, rights relating to the rights of the Contract or the Amalgamation Institution etc.

(2) Documentary Rights – These are the rights which are held by the members under memorandum of understanding and articles of the Union.

(3) Statutory rights – These are rights which cannot be changed by amending its documents by the Company, for example, the right to transfer the share held by the Shareholders which are held by them under Section 82 of the Act.

The related rights organised by the Company’s members cannot be used collectively, but there are rights which can be used independently and personally.

Personal rights of members – the following members have personal rights –

(1) The right to obtain memorandum of articles on request: Each member has the right to obtain the copy of contract made with memorandum of Company, Articles and Manager etc. Similarly, in accordance with section 113 of the Companies Act he is authorised to obtain the certificate of the share and also has their right under Section 116 to obtain the proceedings and details of the General Meetings of the Company.

(2) Members have the right to obtain bonuses.

(3) Right to pre-Origin – If the company plans to grow under Section 81 of Copman, then by releasing its capital fresh shares, the preference of its members should be provided to take these shares as it is their statutory right to which they can use personally.

(4) The right to inspect the Books (Register) of Company-Each Member is to register or inspect the documents and records and obtain information therein.
for yourself too.

(5) Record of transfer of shares – According to section 82 of the Act, every member has got the right that he may transfer his shares in accordance with the rules given in the articles.

(6) The right to share in surplus property, if any, on the liquidation of the company – at the time of liquidation, each member has the right to obtain a share in the ratio of their shares from the remaining property of the company after distribution among its creditors.

(7) Rights in relation to meetings – All rights relating to company meetings are held by each member of the Company. Similarly, he can be the candidate for the post of director in the company’s election.

(8) The right to enrol for the appointment of the auditor of the Accounts as per section 224 of the Companies Act, if the Company has not appointed an auditor in its general meeting then its member may request the Central Government to appointment of the auditor.

(9) Right to apply for appointment of liquidator – Member may present this request in the court in case of liquidators being voluntarily curved by the company’s creditors.

Member’s Collective Rights – Other than the above said that the members of the company have also got some collective rights. These are explained in the Board Memorandum. These rights are rights that cannot be used by members personally. To facilitate the study, the collective rights of members can be divided into three sections.

a. Those rights can be used by bare majority,

b. Those rights can be used by special majority, and.

c. The rights that do not require majority but tan is used by a particular minority.

We may retain people of the following rights in collective rights-

(1) According to the section
Requesting to the conductor of the Company to call 169 of the Companies Act, but in this way the number of calling members is 1/10 of the total franchise or 1/10 of the total payments capital amount.

(2) The Central Government’s request to investigate the cases of the Company.

(3) In accordance with section 284, the right to suspend the conductor of the company by collective resolution.

(4) Right to change Board memorandum and articles.

(5) Right to remove conductor.

(6) Right to claim against conductor.

(7) Right to research of the company.

(8) Right to demand for voting.

(9) Right to demand for company elections collectively.

In case of a public company, at least five members and in case of a private company if the total number of up to seven then in case of one member and more than seven then at least two members should be in favour of this demand. Generally, courts do not accept suits that relate to the company’s internal decision. Fons vs Hareotel, in the case of 167 AD R 187, it was assessed that any member may personally or collectively offer suits for a suit related to the company’s internal disputes.

liabilities of members

The liabilities of members depend on the form of the company.

(1) The company with unlimited liabilities is fully responsible for the payment of loans made during the period of membership each member.

(2) In case of curving in the limited company by security, each Member is obliged to pay the assessment amount in the liability section in the Board Memorandum.

(3) The liability of each member is limited to the cost depicted on its shares in the company limited by shares. Under section 36(2) of the Act, every shareholder must pay the same as the total payable amount of his shares as he will do for loans paid personally.

(4) Even while shares transfer will be held responsible for paying the amount payable to the shareholder until other party name is supported in the register of the company members.

(5) In case of the company having curved its liability will be continuously effective for one year from the date of curving.