All shareholders are members of a company but all members

Shareholder and Member. A ‘Shareholder’ is a person who holds shares in the company whereas a ‘member’ is a person whose name appears in

the Register of Members. For all practical purposes the words “shareholder” and “member” are used inter-changeably because in the normal course a

shareholder will also be a member and a member will also be a shareholder. But if looked at from a closer angle, we can see a few

exceptional cases where a shareholder may not necessarily be a member

and a member may not necessarily be a shareholder. For example, companies

limited by guarantee or unlimited companies having no share capital will have only members but no shareholders. Moreover, a subscriber to the

Memorandum is a member even though no shares are allotted to him-so he is a member without being a shareholder. Contrarily, a holder of share warrant

is a shareholder but not a member of the company as his name is removed from the Register of Members immediately on issue of share warrant.

Similarly, a transferee or the legal representative of a deceased member holds shares but does not become a member before the time the Board of

Directors approves the transfer or transmission and his name is entered in the Register of Members of the company. On the other hand, transferor or the

deceased person is a member so long as his name is on the register of members whereas he cannot be termed a shareholder.

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