What is the difference between a ‘member’ and a ‘shareholder’?

Absolutely nothing! The terms ‘member’ and ‘shareholder’ are interchangeable and both describe an entity with ownership of the company. An Australian proprietary company must have at least one member but no more than fifty.

Company members must either be natural persons or companies in their own right. It is imperative that a company can be traced back to individual people at some point. Of course trusts and estates can also technically be members within a company, however their interest is registered under the name of the primary trustee.

A company member does not undertake liability, such as debt, for the company him/herself as the company becomes its own legal entity.

Furthermore, there is no minimum age requirement for company members, yet a company can determine its own age requirements. That said, it is assumed that all company members have consented to their inclusion in the company in writing. Therefore a member must have the capacity to provide written consent, such that an infant is unlikely to have.

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Updated — Sep 6, 2015