Who is a member of a company?
12 September 2024
The Companies Act 2006 requires every company to keep a register of members. This register of members has long been viewed as the definitive proof of who is a member of a company (save for certain specific exceptions).
Register of members is paramount
This primacy of the register of members as evidence of membership was recently challenged in the case of Bland v Keegan [2024] EWCA Civ 934. In that case shares in the company were held by two 50% shareholders. One shareholder (A) purportedly forged a stock transfer form to transfer the shares held by the other (B) into their sole name. The register of members was updated to reflect A as the sole 100% shareholder and A then passed a resolution to wind up the company. B argued that the resolution and appointment of liquidators was void and of no effect owing to the fraudulent transfer.
Both the High Court and the Court of Appeal ruled that, despite the purported forgery of the stock transfer form, the register of members was conclusive as to the identity of membership and therefore who had authority to pass a resolution to wind up the company.
The Birketts view
The case gives welcome confirmation that the register of members is generally conclusive evidence as to who is a member of a company. Unless and until an order for rectification of the register of members is made to address any membership disputes, the validity of resolutions passed is therefore dependent on the entries in the register of members as existing at the time the resolution is passed.
Our team of corporate lawyers are experienced in dealing with shareholder disputes, how to make checks on a company’s membership and how, where relevant, to make an application for the register of members to be rectified.
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Pamela Blore
Services
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at September 2024.