Answer» - On termination of membership, the name of the member is removed from the Register of Members.
- Companies Act empowers every shareholder to transfer his share in the manner laid down in the Articles and in accordance with the provisions of the law.
- A transfer of share takes place when a registered shareholder transfers his shares by sale or gift to another person voluntarily.
- Transfer of shares by operation of law in event of death or insolvency of members is called the transmission of shares. The legal representative/heir in case of death, official receiver in case of insolvency, and administrator in case of insanity replaces the concerned member.
- When the company approves the transfer, the Secretary cancels the name of the seller i.e. (transferor) from the Register of Members, and the membership of the shareholder stands terminated after transferring the shares.
- Thus, I agree with the above statement.
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