The Shareholders of an Offshore Company (Members)

The Rights and Powers of the Members
We feel that it is important that our readers are aware of how a person can become a member of a company, how they cease to become members, and the general rights and powers which they will usually have.

Becoming a Member
There are a number of ways in which a person might become a member of a company. These include subscribing to the memorandum of association on incorporation, applying for shares on the allotment of additional shares by the company, as a result of a transfer or gift from an existing member, or by purchasing the shares.

Ceasing to be a Member
The ways in which a person may cease to be a member of a company include transferring the shares, selling the shares, the transmission of ownership on the death or bankruptcy of a member and on the liquidation of the company.

Powers of the Members
The members are the owners of the company and have certain rights and powers which can impact on the directors. They also have rights and powers which the directors themselves would not usually have. Usually, the members will have the power to appoint and remove directors, the power to alter the memorandum and articles of association and the power to pass special resolutions at members' meetings which are used to authorise business such as the change of name of the company or placing the company into voluntary liquidation.

Rights of Members
The articles of association will usually set out the members' rights. Some companies have different classes of membership and the rights of those different classes will vary. However, the following is a list of the most common rights a member of a company will have:

Dividends
The members will usually have the right to receive a dividend if one is declared by the directors.

Notice and voting
A member is entitled to receive notice of all members' meetings which are convened by the directors and will have the right to attend and vote at such meetings. If he cannot attend a meeting he has the right to appoint someone to represent him, commonly known as a proxy.

Profits
On winding up, the members usually have the right to receive any surplus of assets.

Share certificate and transfers
Members have the right to have their ownership recorded in the company's records and to receive a share certificate noting or reflecting their ownership. This is certainly the case for those companies which issue registered as opposed to bearer shares.

Accounts
Members usually have the right to receive a copy of the financial accounts of the company.

Meetings
The members have the right to call or request members' meetings.