n Lesotho Law Journal - The investor as a member of a company : a reflection on misused concept




The company as a statutory creature relies mostly on investors for its finances and daily business activities. Obvious though this may seem, but it is not clear who these investors are as in some cases those who are referred to as investors are actually creditors having rights against the company as distinguished from members having rights in the company. The interests of the former may not withstand the true tests of an investment as much as the latter. In similar vein, the terms 'member' and 'shareholder' are indiscriminately applied in describing those with interests in the company. These terms are seen in some quarters as synonymous, but this paper reveals that that conception is misleading as shareholders are not members of the company in all cases. The act of shareholding, in companies that issue shares, is only one of the two important criteria by which the status of membership of a company is attained. The second is registration, which shareholding alone does not fulfil, and which in some cases is seen as more important in defining membership of a company than shareholding.


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