[Opinion] Can a Cooperative Society be a Member of a Company?

  • Blog|News|Company Law|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 3 May, 2023

Cooperative Society

Dr K R Chandratre – [2023] 150 taxmann.com 27 (Article)


A question that been raised recently by a company which has borrowed some money from a Multi-State Cooperative Society, in the context of Companies (Acceptance of Deposits) Rules 2014, which, among others, exempt from the definition of ‘deposits’ money received by a company from a member of the company. So, if a company receives money from its member (whether called a deposit or loan), it would be a deposit from a member for the purposes of the provisions of sections 73 and the Rules mentioned above. The definition of ‘depositor’ in the abovementioned Rules includes

“any member of the company who has made a deposit with the company in accordance with the provisions of sub-section (2) of section 73 of the Act”.

Who can be a member of a company?

Section (2)(55) of the Companies Act, 2013 (The Act) provides for the definition of the term member as follows:

“(55) “member”, in relation to a company, means—

(i) the subscriber to the memorandum of the company who shall be deemed to have agreed to become a member of the company, and on its registration, shall be entered as a member in its register of members;

(ii) every other person who agrees in writing to become a member of the company and whose name is entered in the register of members of the company;

(iii) every person holding shares of the company and whose name is entered as a beneficial owner in the records of a depository.”

The definition refers to three classes of persons who can be members of a company, namely:

(i) persons who have subscribed to the company’s memorandum of association;

(ii) persons who have agreed to become members; and

(iii) persons who hold shares and whose names are entered as beneficial owners in the records of a depository.

Under the third of the abovementioned three categories, in order to be registered as a member of the company, the person must agree in writing to be a member and his name should also find a place in the register of members.

In all three categories, the keyword is ‘person’. According to the definition, the basic condition to become a member is one who can be a member must be a ‘person’. In other words, only persons can be members.

Click Here To Read The Full Article

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Leave a Reply

Your email address will not be published. Required fields are marked *

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied