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As per laws In India, LLP can be a member of Company since LLP is a seperate entity.
FOLLOWING CAN BE A MEMBERS:
1) A Company as a Member: - Since a company is a separate legal artificial person, it can become member of another company, if it is so authorised by its articles and memorandum of association, or if it takes the shares of another company by way of a compromise or arrangement.
But a company cannot become member by itself or in other words company cannot acquire its own shares and the reason for it is that Section 77 of the Act which lays down “A company cannot acquire its own shares because it amounts to reduction of share capital without the sanction of the court, which is illegal”
2) A Firm cannot be a Member: - Since a partnership firm is not a separate legal entity having a separate entity from that of the partners, therefore it cannot become a member of a company.
3) An HUF cannot be a Member: - A HUF (Hindu Undivided Family) cannot become a member in its own name. This is because an HUF does not enjoy a seperate legal entity. A HUF can purchase shares in a company through its Karta .In other words it is only the Karta who becomes a member of the company and not the other members of the HUF.
4) A Foreigner: - As per the Indian Contract Act 1872 a foreigner can become a member of a company but he has to fulfill certain conditions for example he has to take permission from the Reserve Bank of India under the Foreign Exchange Regulation Act, 1999. However the right of a foreigner as a member is be suspended if he becomes an alien enemy.
5) An Insolvent: - An insolvent cannot become a member of a company, but a member who becomes insolvent may be a member of the company. Although the beneficial interest in his shares will be with that of the official receiver .He does not cease to be member of company on becoming insolvent, unless articles specifically provide for that.
6) A Registered Society: - A society registered under Societies Registration Act, 1860, can hold shares in its own name and is a member provided there is a provision for that in Articles and Memorandum.
7) A Trustee cannot be a member: - A trustee cannot become a member of a company as a trustee, but he can be member in his personal capacity.
8) Joint Membership: - When two or more than two persons hold shares jointly in a company; it is called as joint membership. Joint membership is legal only when articles provide for it. The articles also provide for the maximum number of joint holders in an application, which is generally three.
9) Limited Liability Company(LLP) – An LLP being a separate entity (like a company) may become member of a company.
