What is the diference between Members and Shareholders of a company
A company is a legal entity created by its members.
If we talk about a company limited by shares, shareholders are the members of the company. People use the word "members" and "shareholders" interchangeably, as there can be no membership without through shareholding. Generally, it is true but sometimes there can be some exceptions
for example:- A person may become a holder of share(s) by transfer but will not be called its member until his name is register of members.
Shareholders | Members |
---|---|
Any company which is limited by shares or unlimited company having no share capital will not have shareholders. | Any company limited by gurantee 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. |
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