Final Project Presentation Company law
Professor Farooq Awan
Pakistan’s Regulatory Authority of Company’s Registration
Security and Exchange Commission of Pakistan
A limited company is a company in which the liability of members or subscribers of
the company is limited to what they have invested or guaranteed to the company.
Limited companies may be limited by shares or by guarantee. The former may be
further divided into public companies and private companies. Who may become a
member of a private limited company is restricted by law and by the company's
rules. In contrast, anyone may buy shares in a public limited company.
• Minimum paid-up capital Rs. 1 Lakh.
• Restricts the transfer of shares.
• Minimum 2 and maximum 50 members.
• Prohibits any invitation to the public to
subscribe for any shares.
• Prohibits any invitation or acceptance of
deposit from persons other than its members,
directors or their relatives.
Provisions of Private Companies
Stages in the
According to company ordinance 1984 the process of
company formation is divided into 4 stages
Promotion means to start the business it is the
first stage in the formation of company that people
who take initial steps in the formation of company
are called promoters these people prepare the
legal documents and takes step for its registration
the promoters shall have to observe the legal
formalities drafting the following documents…
Promotion stage (1st stage)
Article of Association
Necessary Documents by SECP
Phase – 1
• Make an application to Additional Registrar of Companies, Company Registration Office, seeking
name availability along with paid challan Rs.500/- (in case of physical application) in any branch of
MCB Bank Limited.
• Name availability can be checked online.
• After receiving name availability certificate, make an application for incorporation of the company
along with following documents:
• FORM- 1, (One copy) duly filled in, signed and witnessed.
• FORM- 21, (One Copy) duly filled in and signed.
• FORM- 29 (Two copies) duly filled in and signed.
• MEMORANDUM OF ASSOCIATION
• ARTICLES OF ASSOCIATION
• 4 copies duly signed by each subscriber/promoter, witnessed and dated.
• Copies of Valid CNIC of Promoters and witness.
• Special Power of Attorney on Stamp paper (worth 500) duly notarized.
• Copy of Name availability Letter issued by SECP
• Original Fee Challan
• Covering Letter
Securities and Exchange Commission of Pakistan
established under the Pakistan Act 1997
It was operational as a body Corporate on 1st
important functions of the SEC is registration of
This task has been entrusted to the Registration
Department, Company Law Division which has its
field offices known as Company Registration
Memorandum of Association
Main document of the company.
It defines the objects of the company for which it is established.
Lays down the conditions upon which alone the company allowed to
Charter of the constitution of the company.
It defines the scope of its activity and also states that anything
beyond it is unauthorized and illegal.
The Memorandum of Association
•Must be printed
•Divided into paragraphs
•Signed by each subscriber (seven or more in case of a public company)
•Add his name, address and description
•Presence of at lease one witness who is to attest the signature.
Contents of MOA
1. Name of the company
2. Registered office of the company
3. Objects of the company
4. Liability of the members
5. Details of the capital of the company
6. Subscription or Association clause
The Company is a legal entity. Therefore, it must have its name to
establish its identity.
The name of the company should not be Similar, Undesirable, or which
will mislead the public. E.g. Indian National flag, name or pictorial
representation of Mahatma Gandhi or Prime Minister of India, etc.
Its use has been, therefore, prohibited by the Government under the
Emblems and Names (Prevention of Improper Use) Act, 1950.
The company can change its name by passing a special resolution and
obtaining he approval of the Central Government.
Registered Office Clause
Every company must have a registered office from the
day it starts its business or within 30 days of getting the
Certificate of Incorporation, whichever is earlier.
Memorandum of Association must state the name of
the State in which the registered office of the company
This clause is important as it mentions the residence for the purpose of
the communication with the company.
It determines the jurisdiction of the company and also mentions the
place where all the records of company are maintained.
Where the company wants to change its registered office from one state
to another then it can do so by passing a special resolution as well as by
confirmation of Company Law Board.
It defines the limits and extent of the activities of
The 3 types of objects are: -
• Main objects
• Objects incidental or ancillary to the
attainment of the main objects.
• Other objects.
Objects stated in the main objects are to be
pursued by the company immediately after
incorporation or within reasonable time thereafter.
This clause states that the liability of the
members is limited to the extent of the
shares subscribed by the member or
shareholders if the company is formed with
Amount of capital with which the company is
to be registered and its division into shares of
a fixed amount must be stated in the MOA of
The capital with the company is registered is
called “Authorized capital” or “Registered
Alteration of MOA
Sec – 21 Change in Name: -
Application is made with the registrar of the
company for availability of new names.
Special resolution is passed in the general
meeting of the company with members.
Approval of Central Govt. is required.
No approval is needed when a company changes
its name by addition or deletion of word
The change of name is complete only after the
issue of fresh certificate of incorporation by the
Article of Association
Defines the responsibilities of the directors, the kind of business to be
undertaken, and the means by which the shareholders exert control over
Contains the rules & regulations for the internal management of the
AOA needs to be filed with the Registrar of Company.
AOA can be altered from time to time.
Contents of AOA
Payment, calls, transfer, lien,
forfeiture etc. Of shares
Share certificate & warrants
Rights of shareholder
qualification, powers etc. Of
Board of Directors
Accounts & Audit
Payment of dividends
Alteration of Article of Association
It can be altered with special resolutions.
Approval of the central government for
conversion of company from public to private.
AOA should not violate provisions of MOA and
company law board.
Special resolution passed or approved by central
government must be filed with the Registrar
within 1 month.
Limitations of Article of Association
The alteration cannot be made so as to increase the liability of
members without his/her written consent.
Limit the number of members to 50.
Prohibit any invitation to the public to subscribe for any share in,
or debenture of the company.
Restrict the right to transfer shares.
Approval of central government: -
Appointment or re-appointment of Director
Increase in remuneration of Director
Memorandum of Association Article of Association
It is a charter of a company
determining constitution and
activities of the company.
It contains rules & regulations regarding
internal management of the company.
Every company must have a
Public companies limited by shares may
or may not have articles.
Alteration of Memorandum is much
difficult and strictly regulated.
Articles can be easily altered by a
Prior permission is required. No need for permission(in some cases)
Defines the relationship between
company & outsiders.
Defines the relationship between
management & shareholder.
To format and incorporate now u need to take following items in your hand and submit to
SECP for further process and establishment of your desired company:
The second stage for formation of company is to get the company registered. for registration
of company following documents are submitted registrar for the registration of company.
Memorandum of association (MOA)
Article of association (AOA)
Nominal capital (Value or form of Capital Amount)
Special Power of Attorney on Stamp Paper
List of directors
Original Fee Challan
Copy of Valid CNIC’s of Promoters and Witnesses
Declaration (Name Availability Certificate)
Form 1 , Form 21 , Form 29 ( duly filled as per instructions and requirement )
If the registrar is satisfied with documents then he will issue certificate of incorporation
private limited company can start its business after receiving certificate of incorporation. but
a public limited company wait for certificate of commencement.
Commencement stage ( 4th stage)
• A public company has to received the
certificate of commencement before starting
• A company submits the following documents
• Minimum subscription
• Directors shares
• After verifying these documents registrar issue
a certificate of commencement they can start