नेपाल जडिबुटी ब्यावसायी संघ सुर्खेतका पधाधिकारी बिवरण || २०७६/७७

 

Introduction 

We have produced this information booklet to explain the role of members and shareholders in a company under the Companies Acts. 

What is a member? 

A member is one of the company’s owners whose name has been entered on the register of members. Members delegate certain powers to the company’s directors to run the company on their behalf. 

What is a shareholder? 

A shareholder is a person who buys and holds shares in a company having a share capital. They become a member once their name is entered on the register of members. Many companies limited by guarantee do not have a share capital, and consequently, their members are not shareholders. 

Do all members have equal rights? 

In some companies with a share capital, each share equals one vote. In other companies, each member has one vote. However, a company’s articles of association can make different voting arrangements. For instance, different classes of shares may give shareholders different rights in the company.

In addition, a member’s share transfer rights in private companies may be restricted. For instance, common restrictions are that a member who wishes to transfer shares must offer them to the existing members of the company first and must permit the company’s directors to refuse to register a transfer of shares to a person of whom they do not approve.

What are the duties of members? 

An important duty of a member is to pay the money they are liable to pay by virtue of their membership. If a company is being wound up, each member has to contribute to the company’s debts based on their liability limits. In a company limited by shares, members are only committed to paying the price of the shares allotted to them. In the case of a company limited by guarantee, members are liable to contribute a set amount, which may be as low as E1. However, the members of a company with unlimited liability are liable to pay all of its debts if it is wound up. It is also essential that members take part in supervising the performance of the company and its directors to protect their financial and other interests. 

What are the rights of members? 

The rights of members are stated in the Companies Acts and in the company’s memorandum and articles of association (its ‘constitution’).