As the name suggests the shareholder are the members of the company who holds its share and the rights to take the majority of decisions for the company. By investing in the shares of company any natural person or the legal entity can become the shareholder in the company. Below mentioned categories are eligible for becoming the shareholder in the company.
Any individual person can take the shares of the company and become a shareholder in it. However a minor person is not eligible to enter into agreements that make the contracts entered into by minor null and void. In this regard the guardian of the minor is allowed to enter into the share purchase transaction on behalf of the minor.
A company is also allowed to become the member of the company by purchasing its shares. However, in order to become the member the company is required to pass the board resolution in this regard by convening a proper board meeting in this regard.
An unregistered partnership firm is not a legal entity and thus is not considered as separate entity from its partners. Thus, the partnership firm is not eligible for becoming the shareholder of the firm. However, the registered partnership firm is eligible to become the shareholder of the company.
Limited Liability Partnership
Unlike a traditional partnership firm a Limited Liability Partnership is a separate legal entity from its members and thus is eligible to enter into any transaction on its own behalf. This make the LLP authorized to become the shareholder in the company.
If the trust is not registered as cooperative society it cannot hold shares in its name but the trustees of the trust can hold the shares of any company. However, when the trust is registered as the co-operative society it can hold shares in its name.
A person who is a foreign national or the Non-Resident Indian can also invest in the shares of the company subject to the rules and regulations of FDI and FEMA.
State or central Government – The state can become the shareholder in the company through its president or the governor. Also the governor or the president can nominate any other person to act as a shareholder in its behalf and act accordingly.
All the above-mentioned categories are empowered to become shareholders in the companies and exercise the rights after becoming the shareholder.