Company members are the individuals or entities who legally own or are recognised as part of a company, and they hold key rights such as voting and decision-making powers. For your business, understanding who qualifies as a member is critical, as it determines control, ownership structure and legal responsibility, particularly in disputes or governance decisions. Members are often shareholders in companies with share capital, but the term is broader and can include owners of companies without shares, such as those limited by guarantee.\u00a0 This article explains who company members are, how they differ from shareholders and what rights and responsibilities they have.<\/p>\n\n\n\n
Shareholders are essential to a company. However, surprisingly, the term does not have a legal definition. Instead, company law – including different Acts of Parliament, secondary pieces of legislation and court cases – tend to use the term \u2018members\u2019 when referring to shareholders. There are a few reasons for doing so. The following section explores these reasons. <\/p>\n\n\n\n
Generally, the term \u2018members\u2019 is more inclusive. One reason is that members can describe owners of companies and other incorporated entities that do not have any share capital. <\/p>\n\n\n\n
For example, companies limited by guarantee do not have any share capital. Instead, those that invest in a company limited by shares have their liability limited by a pre-agreed amount. So, it would not make sense to refer to them as shareholders, given there are no shares to own. <\/p>\n\n\n\n
Similarly, limited liability partnerships are owned by partners. However, because they share some similarities with companies, like being incorporated entities, the law calls an LLP’s partners \u2018members.\u2019 <\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n