If a member's agreement, signed by all parties, clearly states that the nominated parties will only be reverted to shareholders after a certain period of time, can those members call themselves shareholders prior to that date being reached under commercial law?
QLD Commercial Law - When Do Members Become Shareholders?
- Thread starter Fisho
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There's not enough information to tell.
Calling yourself a 'shareholder' may make no difference. I'm guessing you're looking to attach certain rights based on the designation as 'shareholder'. If that's the case, the name makes no difference - you've got to look at the rights given under the legislation and by the terms of the agreement (as long as it isn't inconsistent with what the law allows).
Generally speaking, members are shareholders in the company in question has share capital. Not all companies do however - such as a public company limited by guarantee.
If, instead, this is along the lines of a change in the company structure (such as set out in section 167 - company by guarantee changing to a company limited by shares), the Corporations Act will likely set out the mechanism that operates.
Calling yourself a 'shareholder' may make no difference. I'm guessing you're looking to attach certain rights based on the designation as 'shareholder'. If that's the case, the name makes no difference - you've got to look at the rights given under the legislation and by the terms of the agreement (as long as it isn't inconsistent with what the law allows).
Generally speaking, members are shareholders in the company in question has share capital. Not all companies do however - such as a public company limited by guarantee.
If, instead, this is along the lines of a change in the company structure (such as set out in section 167 - company by guarantee changing to a company limited by shares), the Corporations Act will likely set out the mechanism that operates.
It's Pty Ltd Co. Share allocation but no capital payments made. Sole Dir in place. Issue is more the "shareholders" have made representations for business without the SD's knowledge and caused problems in doing so. SD trying to "reign in" "rabid members"
Members of a company become members when their names are recorded in the register of members - that's what the defining point is. If they've been issued shares (even if they're not yet paid for), then the issue needs to be recorded.
Your issue is more about corporate governance. The company's director is the one who runs the company, but they are there are the collective will of the shareholders. You need to call a general meeting of all the shareholders and 'hash out' the issue, being aware that most company constitutions require that a member's shares be fully paid up before they can vote. If you're not satisfied with the situation, resign as a director subject to a new director being appointed. The shareholders will be forced to appoint a new one. Since you're a sole director, I would not suggest resigning without ensuring another director is appointed, as this may be considered a breach of your director's requirements to ensure compliance with the Act.
Your issue is more about corporate governance. The company's director is the one who runs the company, but they are there are the collective will of the shareholders. You need to call a general meeting of all the shareholders and 'hash out' the issue, being aware that most company constitutions require that a member's shares be fully paid up before they can vote. If you're not satisfied with the situation, resign as a director subject to a new director being appointed. The shareholders will be forced to appoint a new one. Since you're a sole director, I would not suggest resigning without ensuring another director is appointed, as this may be considered a breach of your director's requirements to ensure compliance with the Act.
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