REGISTER OF MEMBERS: Section 88 of the Companies Act, 2013 lays down:
- Every company shall keep and maintain the following registers namely: –
- Register of members indicating separately for each class of equity and preference shares held by each member residing in or outside India;
- Register of debenture-holders; and
- Register of any other security holders.
The Register of Members had to contain the following particulars.
- The name and address of each member and his occupation;
- The number of shares held by each member and the extent to which the shares have been paid up. Each share should be distinguished by its appropriate number; the class of shareholders to which the member belongs should be indicated;
- The date at which he was entered in the register as a member; and
- The date at which any person ceased to be a member.
- Register and index of beneficial owners [S. 88(3)]-Where shares or debentures are held in the demat form, the register and index of beneficial owners maintained by a depository under Section 11, Depositories Act, 1996 is to be deemed as an index and register of members and that of debenture-holders, as the case may be.
- Foreign register of members [S. 88(4) : Where a company has issued shares or debentures to persons resident in another country, the company may, if so authorised by its articles, keep a branch register in that country. It will be known as a ‘ “foreign register”. It has to be maintained in the prescribed manner.
If a company does not maintain a register of members or debenture-holders or other security holders or fails to maintain them in accordance with the provisions of sub-section (1) or sub-section (2), the company and every officer of the company who is in default shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to three lakh rupees and where the failure is a continuing one, with a further fine which may extend to one thousand rupees for every day, after the first during which the failure continues.
Rule 5 of Companies (Management and Administration) Rules, 2014:
- The entries in the registers maintained under section 88 is to be made within seven days after the Board of Directors or its duly constituted committee approves the allotment or transfer of shares, debentures or any other securities, as the case may be.
- The registers shall be maintained at the registered office of the company unless a special resolution is passed in a general meeting authorising the keeping of the register at any other place within the city, town or village in which the registered office is situated or any other place in India in which more than one-tenth of the total members entered in the register of members reside.
- Consequent upon any forfeiture, buy-back, reduction, sub-division, consolidation or cancellation of shares, issue of sweat equity shares, transmission of shares, shares issued under any scheme of arrangements, mergers, reconstitution or employees stock option scheme or any of such scheme provided under this Act or by issue of duplicate or new share certificates or new debenture or other security certificates, entry shall be made within seven days after approval by the Board or committee, in the register of members or in the respective registers, as the case may be.
Rule 8 of Companies (Management and Administration) Rules, 2014: The entries in the registers maintained under section 88 and index included therein shall be authenticated by the company secretary of the company or by any other person authorised by the Board for the purpose, and the date of the board resolution authorising the same shall be mentioned.
LEADING CASE LAW: A person who claims to have purchased the shares of a member will be entitled to have his name entered in the register by satisfying the requirement of either Section 108 or 109 [Corresponds to section 56 of the Companies Act, 2013].
LEADING CASE LAW:
[Lalithamba Bai v. Harrisons Malayalam Ltd., (1988) No company should enter in the register a statement that it has a lien on the shares of a member.
Place of keeping, inspection and returns [S. 94]
The appropriate place for keeping the register is the registered office of the company.” The period for which the registers, returns and records are required to be kept is to be such as may be prescribed. Every member and debenture holder, security holder or beneficial owner has the right of inspection without fee but a prescribed fee can be charged from any outsider who wishes to inspect. This is to enable persons dealing with the company to ascertain for themselves the membership of the company. The company may, however, impose reasonable restrictions on the right of inspection, but the register must remain open during business hours each day. The right to inspect also includes the right to make extracts from the register. The company is also bound to supply on demand a copy of the register on payment of prescribed fee. Thus in British India Corpn Ltd v Robert Menzies
A member applied for a copy of the register of members. The company received from him a fee of five hundred rupees, but put him off under pretexts of many kinds. On his application to the High Court, the latter ordered the company to supply a copy immediately. The court said, “It is a fundamental principle of legal administration that where the law requires something to be done there must be in existence a court that can directly order it to be done.”
Now sub-section (5) has, in very clear words, given power to the Central Government to order the company to allow inspection and to give copies forthwith.