Shareholders

A shareholder is a person whose legal relationship with the company arises by virtue of his shareholding in the company. The concept of shareholding is relevant to the right to receive dividends after they have been declared and to participation in a distribution on liquidation.

A person can become a shareholder of a company having a share capital in one of two ways.

By subscribing to the memorandum of association
By agreeing to become a member of the company and the subsequent entering of his name in the register of members. This acquisition of shares can take the form of an allottment of shares directly to the member by the company, in return for an amount of money, or by transfer of some other shareholders shares (Transferor) to the new shareholder (Transferee).
Until registration of transfer has been recorded by the company in its register of members the transfer is incomplete and the transferee does not acquire the status of member.