Minor as a member of the company

Can minors become members of any company…?? If Yes, how he become a member?? What are his rights as a member??

We face these queries in practice and sometimes in employment too as a Professional specifically as a company secretary.

In this article, I have tried to cover all provisions related to minor as a member.

Under section 2(55) of the Companies Act, 2013, “Member”, in relation to a company, means—

(i) the subscriber to the memorandum of the company who shall be deemed to have agreed to become a member of the company, and on its registration, shall be entered as member in its register of members;

(ii) every other person who agrees in writing to become a member of the company and whose name is entered in the register of members of the company;

(iii) every person holding shares of the company and whose name is entered as a beneficial owner in the records of a depository.

As per the definition above a person must subscribe to the Memorandum or agrees in writing to become a member or holding shares in Demat account to become a member and his name must be in the register of member.

Minor as a member:

Minor is not competent to contract under Contract Act and hence he Cannot subscribe and/or agrees to become a member in writing. Also, as per the department’s clarification vide Circular No. 1968/5614 dated 26.02.1964, it was stated that the minor is not capable of entering into a contract for the acquisition of shares.

When minor can become a member:

a. Gift- A minor is not capable to enter into a contract nor he can subscribe but he can get shares as a gift.

b. Inheritance- A minor can hold shares when he inherits the shares through a will or succession.

A minor can become a member of a company in the above two situations only and cannot actively buy shares of any company.

Rights of minor as a member:

Voting Rights-

For the purposes of sections 112 and 113 of the Act and Secretarial Standard-2 which talks about General Meetings, Minors are entitled to vote at general meetings through their guardians only.

Minors can vote at meetings, both on a show of hands and on a poll.


Minors are not liable to pay anything in case of winding-up as member but they are entitled to receive their dues in case the company goes into liquidation.


A minor can become a member of a company through gift and/or inheritance but he cannot buy shares. Furthermore, he will hold shares through his guardian and his guardian will act as a member at all places and will guar the interest and manage the rights and liabilities of the minor.

Author Bio

Qualification: CS
Company: Rohit Chauhan and Co.
Location: Delhi-NCR, Uttar Pradesh, IN
Member Since: 16 Nov 2019 | Total Posts: 1

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October 2021