Members and Shareholders | Company Law - B Com PDF Download

 Page 1


Shareholder
Shareholder
or
or
MeMber
MeMber
Page 2


Shareholder
Shareholder
or
or
MeMber
MeMber
SHARE CAPITAL
SHARE CAPITAL
•
Amount of capital raised by the issue of shares
•
Members are liable to pay difference between reduced and 
nominal value.
AUTHORISED 
CAPITAL
ISSUED 
CAPITAL
SUBSCRIBED 
CAPITAL
CALLED UP 
CAPITAL
RESERVE 
CAPITAL
KINDS OF SHARE 
CAPITAL
UNCALLED 
CAPITAL
PAID UP 
CAPITAL
Page 3


Shareholder
Shareholder
or
or
MeMber
MeMber
SHARE CAPITAL
SHARE CAPITAL
•
Amount of capital raised by the issue of shares
•
Members are liable to pay difference between reduced and 
nominal value.
AUTHORISED 
CAPITAL
ISSUED 
CAPITAL
SUBSCRIBED 
CAPITAL
CALLED UP 
CAPITAL
RESERVE 
CAPITAL
KINDS OF SHARE 
CAPITAL
UNCALLED 
CAPITAL
PAID UP 
CAPITAL
REDUCTION OF SHARE 
REDUCTION OF SHARE 
CAPITAL
CAPITAL
?
To ensure that the company’s assets are not freely 
distributed to the shareholders
?
It is done to:
1. Write off lost capital
2. To pay off surplus capital
 PROCEDURE:
?
Authority of articles must be secured
?
Special resolution
?
Petition to the Court
?
Registration
Page 4


Shareholder
Shareholder
or
or
MeMber
MeMber
SHARE CAPITAL
SHARE CAPITAL
•
Amount of capital raised by the issue of shares
•
Members are liable to pay difference between reduced and 
nominal value.
AUTHORISED 
CAPITAL
ISSUED 
CAPITAL
SUBSCRIBED 
CAPITAL
CALLED UP 
CAPITAL
RESERVE 
CAPITAL
KINDS OF SHARE 
CAPITAL
UNCALLED 
CAPITAL
PAID UP 
CAPITAL
REDUCTION OF SHARE 
REDUCTION OF SHARE 
CAPITAL
CAPITAL
?
To ensure that the company’s assets are not freely 
distributed to the shareholders
?
It is done to:
1. Write off lost capital
2. To pay off surplus capital
 PROCEDURE:
?
Authority of articles must be secured
?
Special resolution
?
Petition to the Court
?
Registration
METHODS OF REDUCTION 
METHODS OF REDUCTION 
According to Section 100 of the 
Companies Act:
1.Reduce liability of members on shares not 
fully paid up
2.Write off lost capital
3.Pay off excess paid-up share capital
Page 5


Shareholder
Shareholder
or
or
MeMber
MeMber
SHARE CAPITAL
SHARE CAPITAL
•
Amount of capital raised by the issue of shares
•
Members are liable to pay difference between reduced and 
nominal value.
AUTHORISED 
CAPITAL
ISSUED 
CAPITAL
SUBSCRIBED 
CAPITAL
CALLED UP 
CAPITAL
RESERVE 
CAPITAL
KINDS OF SHARE 
CAPITAL
UNCALLED 
CAPITAL
PAID UP 
CAPITAL
REDUCTION OF SHARE 
REDUCTION OF SHARE 
CAPITAL
CAPITAL
?
To ensure that the company’s assets are not freely 
distributed to the shareholders
?
It is done to:
1. Write off lost capital
2. To pay off surplus capital
 PROCEDURE:
?
Authority of articles must be secured
?
Special resolution
?
Petition to the Court
?
Registration
METHODS OF REDUCTION 
METHODS OF REDUCTION 
According to Section 100 of the 
Companies Act:
1.Reduce liability of members on shares not 
fully paid up
2.Write off lost capital
3.Pay off excess paid-up share capital
Distinction between shareholder 
Distinction between shareholder 
and Member
and Member
Shareholder Shareholder Member Member
A company limited by guarantee or an 
unlimited company having no share 
capital will not have shareholders
A company limited by guarantee or an 
unlimited company having no share 
capital will have only members
A holder of a share warrant is a share 
holder
A holder of a share warrant is not a 
member
A person who has transferred his 
shares ceases to be a holder of those 
shares as from date of transfer
A  person continues to be a member 
till such time the transfer is registered 
in the name of transferee in books of 
the company
A legal representative of a deceased 
member becomes a shareholder 
immediately on death of member
A legal representative of deceased is 
not a member until he gets his name 
entered in register of members