11 clsp chief executive & secretary

7/31/2019 11 CLSP Chief Executive & Secretary

1/4

Chief Executive1

An Individual Appointed Under Control & Directions of Board of Directors Has Substantial Management Powers (that seem to be whole) Includes a Director Under a Contract Maximum for 3 Years

Appointment of Chief Executive [u/s. 198-201]

1. Every Company except a Company managed by a Managing Agent shall have a Chief Executiveappointed in manner provided u/s. 198 & 199.

2. Term:a. As determined by the directors or the company in General Meetingb. If also a director, for a period not exceeding 3 year from his appointment.

3. Restriction on Appointmenta. No person who is ineligible to become a director of a company u/s. 1872 shall be appointed CEO

4. First Chief Executivea. Appointed by Directorsb. Earlier of,

i. after date of Commencement of Business; orii. 15th day after date of incorporation.

c. Hold office up toi. the first Annual General Meeting (AGM);

ii. Shorter period fixed by Directors5. Subsequent Chief Executive

a. Appointed by Directorsb. Within 14 days from the date of

i. Election of Directors u/s. 178; orii. Office of Chief Executive falling vacant

c. Can be reappointedd. Can be a director, but such appointment shall not be for a period exceeding 3 years.e. Retired Chief Executive can continue to perform his functions until his successor is appointed

1Chief Executive: In relation to a company

1. Means an individual who, subject to the control and directions of the directors, is entrusted with the whole, orsubstantially the whole, of the powers of management of the affairs of the company, and

2. Includes a director or any other Person occupying the position of a chief executive, by whatever name called, andwhether under a contract of service or otherwise.

2Ineligible to become a Director u/s. 187

1.

Minor2. Unsound mind3. Has applied to be adjudicated as an insolvent (pending application)4. Undischarged insolvent5. Convicted for an offence involving moral turpitude by court of law;6. Debarred from holding such office under any provision of Companies Ordinance7. Shown lack of fiduciary behavior and declared by the Court u/s. 217 at any time during the preceding five years8. Not a Member9. In case of Listed Companies

a. Declared by a Court as a defaulter in repayment of loan to a financial institutionb. Engaged in business of Brokeragec. Declared as defaulter by Stock Exchange of which he is a memberd. Spouse is a director or officer of a corporate brokerage house unless exempted by Commissione. A person shall not be director who is serving ten other listed companies as a director.


2/4

Removal of Chief Executive u/s. 202

Notwithstanding anything a Chief Executive can be removed before expiry of his term by

a Board Resolution passed by 3/4th Majority ; or a Special Resolution

Chief Executive not to engage in business competing with companys Businessu/s. 203

1. A Chief Executive of a public company shall not directly or indirectly engage in any businesswhich is of the same nature as and directly competes with the business carried on by the companyof which he is a chief executive or by a subsidiary of such company.

2. Upon appointment, shall forthwith disclose to the company in writing the nature of such businessand his interest therein

Note: A business shall be deemed to be carried on indirectly by the chief executive if the same is carriedon by his spouse or any of his minor children.

Managing Agent

Managing Agent is a person, firm or company entitled to the management of the affairs of a

company, by virtue of an agreement or contract with the company.

Bar on appointment of Managing Agents, sole purchase, sales agents etc. u/s. 206

Restraining Provision Exception1. No company shall appoint any Managing

Agent.1. Company can appoint a Managing Agent which

is wholly owned or controlled by the Federal or

a Provincial Government

2. No company, carrying on business in Pakistan,shall without approval of the Commissionappoint any sole purchase, sale or distribution

agent.

2. Company incorporated or person ordinarilyresiding outside Pakistan can appoint solepurchase, sale or distribution agent. If major

portion of the business of such company or

person is conducted outside Pakistan.

Remember,

Federal Government may by notification allow any of the following classes of agreement orcontracts with;

an investment adviser in relation to an investment company Registered under SECOrdinance Rules

a foreign collaborator in relation to a company which owns an hotel in Pakistan approvedby the Federal Government

in collaboration with one or more public sector financial institutions and industrialundertakings, approved by the Federal Government

An NBFC licensed to undertake Asset Management Services in relation to an investmentcompany registered with the commission; and

NBFC licensed as a Venture capital Company in relation to a fund registered with thecommission.

Collaboration: Cooperative arrangement in which two or more parties (which may or may not haveany previous relationship) work jointly towards a common goal.

Terms and conditions of appointment of Managing Agent u/s. 207

Where a managing agent is appointed in accordance with provisions u/s. 206, such appointment shall

be subject to such terms and conditions as the Federal Government may impose


3/4

Secretary

Secretary means any individual appointed to perform the

Secretarial,

Administrative; or

Other duties ordinarily performed by the Company secretary.

State which companies are required to appoint a Company Secretary under

Companies Ordinance 1984Section 204A provides that

A listed company shall have a whole time secretary3; and A Single Member Company shall have a secretary possessing such qualifications as may be

prescribed

The listed companies are required to appoint full time secretary and duties of secretary may not be

assigned to any other officer4of the company in addition to his own duties and responsibilities.

However, a whole time secretary can be assigned additional job if the management considers it

appropriate.

Note: A Single Member Company is also required to have a Company Secretary but he does not

necessarily be a whole time secretary.

Qualifications of a Company Secretary [Rule 14B]

1. Listed Company (Full Time Secretary)a. Holding Masters degree in business administration or commerce or being a law graduate

from a university recognized by the HEC and having at least two years relevant experience;

or

b. A member ofi. Recognized body of professional Accountants such as ICAP, ICMAP, etc; or

ii. Recognized body of Corporate of chartered Secretaries such as ICSPc. A person having not less than 5 years experience and already engaged by a public listed

company as Company Secretary before the 26th October, 2002, may continue to be so.

2. Single Member Companya. Holding a Bachelor degree from a university recognized by the HEC

Does every company need a secretary?No. Companies Ordinance required only a listed company to have a whole time secretary and a single

member company to have a secretary.

Does a company Secretary have any powers?No, but the Ordinance allows them to sign the statutory returns and applications to be furnished to the

Registrar and the Commission.

What are the rights of a company secretary?Depend on the terms of his/her contract with the company. The secretary has no special rights under

the Ordinance.

3Whole Time Secretary: In relation to a public listed company means a full time employee designated as secretary to

perform this specific assignment4Officer u/s. 2(24): Includes any director, chief executive, managing agent, secretary or other executive of the company,

howsoever designated and does not include an auditor.


4/4

What are the duties of a company Secretary?They are not specified by the Ordinance, but are usually contained in an employment contract.

Though we can group the duties of a company secretary as

1. Special Duties:a. May be liable for defaults committed by the company for example, failure to file within

prescribed period any change in the particulars of the companys directors and officers.

b. Make out a statement of the companys affairs ifi. an administrative receiver or a provisional liquidator is appointed; orii. if a winding up order is made by the Court

2. Other Duties:a. Maintaining the Statutory Registers

b. Ensuring that statutory forms are filed promptlyc. Providing members and auditors with notice of meetingd. Sending the Registrar copy of special resolutionse. Keeping or arranging for the having of minutes of directors meetings and general

meetings

f. Ensuring that people entitled to do so can inspect company recordsg. Custody and use of the common seal.

11 clsp chief executive & secretary

Documents