CAPITAL AND SHARES 
L 
The general nature of shares and some of their charac- Membership. 
teristics having thus been briefly noticed, it becomes material 
to consider how membership of a company is constituted and 
who may be a member. S. 25 of the Act defines a member 
thus: (1) The subscribers of the memorandum of a company 
shall be deemed to have agreed to become members of the 
company, and on its registration shall be entered as members 
in its register of members; (2) Every other person who agrees 
to become a member of a company, and whose name is 
entered In its register of members, shall be a member of the 
company.’ 
As to subscribers, see Chapter II. A director signing and 
delivering to the Registrar for registration an undertaking to 
take and pay for his qualification shares is in the same 
position as a subscriber [s. 140 (2)]. No one can become a 
member until his name is entered on the register. The 
register, however, may be rectified on application to the 
Court, if names are on it which ought not to be on it, or if 
names are not on it which ought to be on it (see s. 100). 
The agreement to take shares is therefore the true test 
whether a person is or can be compelled to accept registration 
as a member of the company, with the consequent liabilities 
of membership. He may apply for shares either personally, or 
by agent; either in writing, or by word of mouth: he may 
contract to take shares, e.g. as a vendor or an underwriter; he 
may be estopped from denying the agreement, either by 
taking no steps to have his name removed from the register, or 
by his conduct in attending meetings and so forth, although 
he may have originally made no agreement to take shares: 
and he may become a shareholder by transfer. 
A shareholder ceases to be a member (1) on death, although 
his estate still remains liable; (2) on transferring his shares 
to another person, though in this case he retains for one year 
a contingent liability in respect of shares not fully paid; 
(3) by a surrender or forfeiture of his shares. In the case of 
bankruptcy of a member, the shares vest in his trustee sub- 
ject to a right of disclaimer: as to the effect of exercising 
which right see Wise v. Lansdell, 1921, 1 Ch. 420. 
Subject to the regulations of the company, anybody may who may 
hold shares. Some companies, however, provide that only hold Shares. 
persons of a certain profession shall be eligible as share- 
holders, and such a provision is valid. A corporation may 
hold shares if authorised to do so by its own memorandum 
and articles, and sometimes even if not so authorised, e.g. 
where shares are taken in payment of a debt [Lands Allotment 
Co. (1894), 1Ch.6161. As to infants see Chapter IX. A company