Shareholder expulsion and forced transfer are invalid unless authorised by existing powers and statutory transfer requirements.

A shareholder remains a member so long as he continues to hold the share, and a company cannot expel him or compel a transfer except under powers then validly contained in its articles and in compliance with statutory transfer requirements. A later amendment to the articles, made without notice to the shareholder, could not retrospectively validate an earlier expulsion or forced transfer. The striking out of the shareholder's name from the register was treated as an omission within section 38(1), so rectification remained maintainable where no lawful transfer had occurred and the shareholder continued to be entitled to stand in the register.

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Issues: (i) Whether the company's resolution expelling a shareholder and the subsequent forced transfer of his share were valid in law; (ii) whether a petition for rectification of the register was maintainable under section 38(1) when the shareholder's name had been struck out and the transferee was not joined.

Issue (i): Whether the company's resolution expelling a shareholder and the subsequent forced transfer of his share were valid in law.

Analysis: A shareholder remains a member so long as he continues to hold the share. The company, on the date of the expulsion resolution, had no power under its then existing articles to deprive him of his share or to compel a transfer. The later amendment to the articles could not bind the petitioner, since it was made without notice to him and could not retrospectively authorise the earlier expulsion. A transfer of shares also required compliance with the statutory requirement of a proper instrument of transfer, and the articles could not override that requirement.

Conclusion: The expulsion resolution and the attempted forced transfer were invalid and ineffectual.

Issue (ii): Whether a petition for rectification of the register was maintainable under section 38(1) when the shareholder's name had been struck out and the transferee was not joined.

Analysis: The striking out of a member's name from the register amounts to an omission within the meaning of section 38(1). Since there had been no valid transfer, the petitioner remained the holder of the share and his name was required to stand in the register. The absence of the alleged transferee as a party did not defeat the petition because no lawful transfer had taken place.

Conclusion: The petition was maintainable and the register was liable to be rectified in the petitioner's favour.

Final Conclusion: The petitioner was held to continue as a member and shareholder of the company, and the register of members was ordered to be corrected accordingly, with costs awarded to the petitioner.

Ratio Decidendi: A shareholder cannot be expelled or deprived of membership and shareholding except in accordance with the company's existing powers and the statutory requirements governing share transfers; an unlawful striking out of his name from the register is an omission rectifiable under section 38(1).

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