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Company Law -1

Lecture # 25

Companies Ordinance 1984 &

Securities and Exchange Commission of Pakistan Act, 1997

Company Law

Sloe Proprietorship

Firm

Company

Classes of Company

• Chartered– A chartered company is an association

formed by investors or shareholders for the purpose of trade, exploration, and colonization.• The arms of the British South Africa

Company.• East India Company.

Classes of Company

• Statutory– Statutory corporation are public enterprises

brought into existence by a Special Act of the Parliament. The Act defines its powers and functions, rules and regulations governing its employees and its relationship with government departments.

– State Bank of Pakistan– Pakistan International Airline

Classes of Company

• Corporation– A form of business operation that

declares the business as a separate, legal entity guided by a group of officers known as the board of directors.• The Securities and Exchange Commission

of Pakistan (SECP)

Classes of Company

• Holding– Type of business organization that

allows one Company (called parent) and its directors to control or influence other Company (called subsidiaries)• Etisalat was named the most

powerful company in the UAE by Forbes Middle East is a holding Company of PTCL – Pakistan.

Classes of Company

• Subsidiary– Subsidiary Company, or Daughter

Company is a Company that is owned or controlled by another Company, which is called the Parent Company.

• Engro Corporation Pakistani public multinational corporation with its many subsidiaries involved in production of fertilizers, foods, chemicals, energy and petrochemicals. subsidiaries include Engro Fertilizers, Sindh Engro Coal Mining Company, Engro Power-gen Limited and Engro Polymer & Chemicals Limited.

Classes of Company

• Associated– Firm over which another

firm exercises a degree of control which is less than the degree of control exercised over a subsidiary.

– In Accounting, such control is typically taken to mean the ownership of at least 20 % of voting shares, and some say in the management of the associate firm. • Jubilee Insurance Company Limited

(JICL), is an insurance company in Kenya, with subsidiaries in Burundi, Tanzania, Uganda and Pakistan.

Classes of Company

• Foreign– which is incorporated under the laws of a

 different Country. A "foreign" Company  must take permission of doing business in interested Country.• Intel Corporation• Gillette Pakistan• Karachi International Container

Terminal (KICT) 

Classes of Company

• Registered– Unlimited

• Unlimited companies are a fairly rare type of companies around globe. Its each member is jointly and severally liable for the  debts of the company in the event of its winding-up. 

– Guarantee• A company limited by guarantee does not usually

have a share capital or shareholders, but instead has members who act as guarantors. The guarantors give an undertaking to contribute a nominal amount (typically very small) in the event of the winding up of the company

– The Karachi/ Lahore/ Islamabad Stock Exchange (Guarantee) Limited.

Classes of Company

• Registered– Single member company - S.R.O.

1086 (I)/2003 A single person may form a single member company and it shall be incumbent on such person to file with the registrar at the time of incorporation a nomination in the form as set out in Form S1 indicating at least two individuals to act as nominee director and alternate nominee director

Classes of Company

• Registered– Private

• A type of company that offers limited liability, for its shareholders.

–  SUAZ AND CO PRIVATE LIMITED–  PERIDOT PRODUCTS PRIVATE LIMITED–  ALI & SONS CORPORATION PRIVATE LIMITED

– Limited Liability• Public companies are strictly regulated, and

are required by law to publish their complete and true financial position.

– Abbott Laboratories Pakistan Ltd.– Al-Ghazi Tractors Ltd.– Bata Pakistan Ltd.

Privileges of Private company

• Only Two Signatories• Prospectus• Not to Offer Shares to Existing Holders

Privileges of Private company

• Commence Business Just after its Incorporation

• May not hold Statutory Meeting

Privileges of Private company

• Disproportionate Shares & Voting Right• Only Two Directors

Next Lecture

Company Law – 2