Shareholders & members as per Companies Act

A member is one of the Company’s owners whose name has been entered on the register of members of that Company.

A shareholder is a person who buys and holds shares in a company having share capital. They become a member once their name is entered on the register of members.

DIFFERENCE BETWEEN MEMBERS AND SHAREHOLDERS

• a registered shareholder is a member but a registered member may not be a shareholder because the company may not have a share capital.

• a person who owns a bearer share warrant is a shareholder but he is not a member as his name is struck off the register of members. This means that a persons can be holder of shares without being a member.

• a legal representative of a deceased member is not a member until he applies for registration. He is however, a shareholder even though his name does not appear in the register of members.