How to induction of a member of a company?

One can be a member of a company by any of the ways mentioned hereunder:

1. by subscribing to the memorandum of association 

2. by agreeing in writing 

- by application and allotment of shares 

- by taking a transfer of shares

- by transmission of shares 

3. By holding equity shares capital of a company whose name is entered as beneficial owner in the record of the Depository.

4. Estoppel i.e. by allowing his name to be in the register of members or otherwise holding himself out or allowing himself to be held out as a member.

Who can become a member of a company?

Every Company is comprised of members though in the contemplation of law a Company is an entity distinct from its constituent members. In all important matters a Company can act only through its members. Only members of a Company are entitles to receive a notice of annual and other general meetings, to exercise voting rights at such meetings and to inspect the Register of Members and others statutory registers maintained by a Company and so on. A Company is created by the members and runs for the members and after the objectives for which it is promoted is achieved, is also wound-up by the members. 

Effect of Alteration in Memorandum or Articles

Notwithstanding any thing in the memorandum or articles of a company, no member of the company shall be bound by an alteration made in the memorandum or articles after the due on which he becomes, member, if and so far as the alteration requires him to take or subscribe for more shares than the number held by him at the date on which the alteration is made, or in any way increases his liability is at that date to contribute to the share capital of, or otherwise to pay money to the company.

Alterations, Changes and Modifications of the Articles of Associations

Any alterations, changes, modifications or amendments of the Articles of Associations also require certain statutory steps/measures:

a. Resolution of the Board of Directors
b. Special Resolution of the Members as per Sec 20
c. Filing of return to the RJSC along altered articles of association through Form-VIII.
d. Obtain certified copy of the articles of association along with amendments.

Restriction on Alteration/Amendment of Memorandum

Alteration/Amendment of Memorandum has got some statutory obligations and effect which must not be ignored. Section 10 express that, “a company shall not alter the conditions contained in its memorandum except in the cases and in the mode and to the extent for which express provision in made in the Act.”

Alterations, Changes and Modifications of the Memorandum of Associations

Any alterations, changes, modifications or amendments of the Memorandum of Associations require certain statutory steps/measures:

Name Clause requires :
a. Resolution of the Board of Directors
b. Name clearance from RJSC
c. Special Resolution of the Shareholders as per sec-11(6)
d. Filing of Return to the RJSC through Form-VIII within 15 days as per sec-88
e. Obtain Certified Copy of the Memorandum along with amendments

Address Clause requires :
a. Resolution of the Board of Directors
b. Filing of Return to the RJSC through Form-VI within 28 days as per sec 77(2)
c. Obtain Certified Copy of the Memorandum along with amendments

Object Clause requires :
a. Resolution of the Board of Directors
b. Special Resolution of the Shareholders
c. Permission from High Court as per sec-12(2)
d. Filing of Return to the RJSC along with court order through Form-VIII as per sec-15 and 88
e. Obtain Certified Copy of the Memorandum along with amendments

Capital Clause requires :
a. Resolution of the Board of Directors
b. Special Resolution of the Shareholders
c. Filing of Return to the RJSC through Form-IV along with fees for additional capital as per 53(4) and 56
d. Obtain Certified Copy of the Memorandum along with amendments

Subscriber Clause: This clause cannot be change.

Articles of Association

The Articles of Association is the constitution for internal administration of the Company. The Articles of Association define the company's purpose and lays out how tasks are to be accomplished within the organization, including the process for appointing directors and how financial records will be handled.