Rights and Cessation of Company Membership

Practice questions covering the rights of company members, legal cases like Longue v. FBN and Trevor v. Whitworth, and the conditions for cessation of membership.

What are the rights of a member regarding dividends and bonus shares?

Members have rights to dividends (debts due and recoverable) and rights to bonus shares if declared, which are shares at premium.

According to the transcript, which section of KAMA addresses the right to attend meetings and vote?

Section one zero seven of KAMA.

What case is cited regarding the right to receive notice of meetings?

Longue versus FBN (also referred to as Longue versus FBM).

What right does a member have if they were entitled to receive notice of a meeting, none was given without explanation, and it was not due to inadvertence?

The member has the right to invalidate whatever resolution took place at the meeting.

In a company limited by shares, what specific voting method do members have the right to demand?

Voting by poll.

Besides voting and dividends, list four other rights of a member mentioned in the transcript.

1. Right to appoint a proxy; 2. Right to own, transfer, sell, or mortgage shares; 3. Right to financial reports; 4. Right to copies of the memorandum and articles of association.

What does a dividend become once it is declared by the general meeting?

It becomes a special debt owed by the company to its shareholders and becomes actionable.

What is the timeframe within which shareholders can recover a declared dividend debt by action in court?

Within twelve years.

According to the transcript, what are the ways a person can cease to be a member (cessation of membership)?

By transfer, by forfeiture of shares, by right and exercise of lien by the company, by valid surrender, and by death.

Which section of the comma refers to the forfeiture of shares?

Section one sixty five of the comma.

What case is associated with the valid surrender of shares?

Trevor versus Whitworth.

What is the effect of transferring all shares to another person?

The person transferring the shares ceases to be a member of the company.

Under what two circumstances can shares be forfeited according to the lecture?

Failure to pay for the shares when called upon, and when shares are bought with stolen funds (forfeited to federal government after conviction).

Which section of the kamma relates to the cessation of membership by death?

Section one seventy nine of the kamma.