Chapter 13 Self-test Questions

. The words 'shareholder' and 'member' are interchangeable and all shareholders and members and vice versa.

True

False

. Section 112 of the CA 206 provides that there are two ways in which a person can become a member of a company. Identify these two instances.

The subscribers of a company are deemed to agree to become members of the company and, upon registration, become members

A person becomes a member of the company if they buy shares in that company

A debenture holder will be a member of the company if they agree to become a member

A person will be a member if they agree to become a member and their name is entered in the company's register of members

. Identify which one of the following statements is untrue.

A person cannot become a member if their name is not entered into the register of members

There is no need for a contract of agreement to exist between the company and the member

A person cannot become a member unless they agree to become a member

A person may be a member of a company with a share capital, even if he holds no shares

. Identify which one of the following statements is untrue.

An unincorporated association should not be accepted as a member of a company

A minor can be a member of a company

The general rule is that anyone can be a member of a company

A subsidiary cannot be a member of its holding company

A company cannot be a member of itself

. A company's register of members provides prima facie evidence of membership matters

True

False

. When can a company refuse to allow a person's request to inspect the register of members?

Where the person making the request is not a member

Where the company is limited by guarantee

When the request is made for an improper purpose

Where the company has less than five members

. Section 125 of the CA 2006 provides that rectification of the register can be sought in two situations. Identify these two situations.

Where a person's name is, without sufficient cause, entered in or omitted from the register of members

Where a person agrees to become a member, but retracts their agreement within 20 days of their name being entered into the register of members

Where the member is a minor, the minor can require that his name is taken off the register

Where default occurs or unnecessary delay takes place in entering on the register the fact that a person ceased to be a member

. The register of members must contain the names of those persons who own and control the company's shares.

True

False

A person whose name is entered

. Which one the following will not be a person with significant control?

A person who holds 25 per cent of the company's shares

A person who holds 30 per cent of a company's voting rights

A person who holds the right to appoint the majority of the company's directors

A person who exercises significant influence over the company

. Which one of the following will not, in itself, cause a person's membership to terminate?

That person dies

That person surrenders their shares

That person is declared bankrupt and his shares are registered in the name of his trustee in bankruptcy

An event specified in the articles occurs that causes that person to cease to be a member

That person forfeits their shares

That person transfers his shares to another person and that other person's name is entered into the register of members

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