Registration shares in the name of public office

The companies act 1956 includes no conditions with consider to the registration of shares in the name of public office. Shares cannot, so be registered in the names of public offices like the collector of central excise or the commissioner of income-tax etc. Similar observations apply to the holder of any other public office which is not a corporation sole constituted by statue, e.g., the administrations general act, 1963.

Section 41(2) offers the mechanism by that a “person” (other than a subscriber of the memorandum) can become a member. The object of corporation sole is to create it possible to distinguish the holder of an office or function in his official and in his private capacity. By this fiction of law, it is possible to attach rights and duties to the holder, for the time being of the office or functions to convey real or personal property to him in his official name and style.

Registration shares in the name of public office

Minimum number of members

Section 12 of the companies’ act 1956 gives that any seven or more persons or where the company to be registered will be a private limited company.

Maintenance of Minimum Number

Section 45 of the act provides that the liability of the company members shall be unlimited. If the number of its members falls below the statutory minimum and the company carries on business beyond the term of six months after the number has so fallen and members are cognizant of the details. The number of whose members falls below the statutory minimum, may be wound-up by the court. The reason is to withdraw the benefits of registration in the event of default of the condition of registration with regard to the minimum number of members.

Restriction on Membership

 By virtue of section 3(1) (iii) (b) of the act 1956, the maximum number of members of a private limited company is limited fifty excluding the present and past employees of the company who continue to be company members. There is no restriction with regard to the maximum number of members of a public limited company.

Cessation of Membership

A person ceases to be a company member when his name is removed from its register of members, which may occur in any of the following conditions:

  • He transfers his shares to another person, the transfer is registered by the company and his name is removed from the register of members.
  • His shares are forfeited
  • His shares are sold by the company to enforce a lien.
  • He is adjudged insolvent and the official assignee disclaims his shares.
  • His redeemable preference shares are redeemed.
  • The company is wound-up.

Expulsion of a member

A controversy had arisen as to whether a public limited company had powers to insert an article in its AoA relating to expulsion of a member by the company board of directors. Where the directors were of the view that the conduct or activities of such a member was detrimental to the company interests.

The department of company affairs clarified that an article for expulsion of a member is opposed to the fundamental principles of the company. The companies act relating to the rights of a member in a company.

Personation and penalty therefor

Section 116 of the act 1956 gives for penalty for personation of a shareholder. The section reads:

“if any person deceitfully personates an owner of any share or interest in a company or of any share warrant or coupon offered in pursuance of the act.

The punishment offered by section 116 for getting or attempting to get or receiving or attempting to get a share, share warrant, coupon due to the rightful owner. According to the criminal law, permission as cheating.

Register of Members

Section 150 of the companies act 1956 as under:

The name, occupation, address, if any of each member.

  • On which date each person was entered in the member as register.
  • On which date if any person ceased to be a member.

Specified that where the company has changed any of its shares into stock and given notice of the conversion to the registrar.

A firm in its own name cannot be registered as member, as a firm is not a legal person like a company registered under this act.

Index of Members

Section 151 of the company’s act 1956 required:

Every company having more than 50 members shall form itself. The index shall in favor of each member include  sufficient mark to allow the entries relating to that member in the register to be readily found.

Place of keeping and inspection of the registers

Section 163 of the companies act 1956 select the place for maintaining a company’s register containing its register and index of members, returns, etc.,

The register of members starting from the date of company registration, the register and index of debenture holders, the index of members. A section 159 and 160 together with the copies of certificate and documents need to be annexed thereto, shall be kept at the company registration office.

Mentioned that such indexes, registers, returns and copies of certificates and documents. It may be kept at the company registration office and shall be kept at any other place within the town, city, village in which registration office is placed as

Such other location has been confirmed for this cause by a particular declaration is passed by the company in their meeting

The registrar has been provided in advance a copy of the reason as specific declaration.

Remedy if inspection is refused

If any inspection or creating of any extract need under this section is rejected. If any copy need under this clause is not sent within the term mentioned in sub-section (4).

Register prima facie evidence

A register of members in prima facie evidence of the truth of its contents. So, if a person’s name to his knowledge is there in the register of company members

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