GDP: The textile industry in Pakistan contributes to a copious 8.5% of GDP. Nishat Mills Ltd., being one of the most modern and largest vertically integrated companies in Pakistan, shares a decent amount. One of the most significant reasons for its growth in recent years, is its competence in anticipating advances in technology, consumer interests, and industry requirements. It has invested in various facilities and modernised machinery to increase production levels and efficiency. The ability to adapt to the growing technological advancements and competition has enabled Nishat to maintain efficient production lines, which in turn has led to growing demand for its products. Due to this commodious and well-maintained infrastructure and the capacity to produce at large volumes and manage timely deliveries, more customers have inclined towards the company during the past few years. Moreover, the company takes pride in its strong management policies, operations, and effective marketing tactics, all of which combined is expected to contribute to its growth in years to come.

1. Share Capital and Nature,
Numbering and Certificate of
Shares
Part V of Companies Act 2017

2. Numbering and Nature of Shares
• Sections 60 states that Every share in a company having a share
capital shall be distinguished by its distinctive number. The each share
in company’s capital should be allotted a separate number i.e. specific
serial number.
• Section 61 The shares or other securities held by and of any member
in a company shall be movable property and transferable in the
manner as provided by the articles of association of the company.

3. Allotment
• 70 (1) Whenever a company having a share capital makes any
allotment of its shares, the company shall, within forty-five days
thereafter:
• (a) file with the registrar a return of the allotment, stating the number
and nominal amount of the shares comprised in the allotment, of
each allottee, and the amount paid on each share; and
• (b) in the case of shares allotted as paid up in cash, submit a report
from its auditor that the amount of shares has been received in full by
the company and shares have been issued to each allottee.

4. Certificate of Shares and other Securities
• 71(1) Every company shall issue certificates of shares or other
securities within thirty days after the allotment of its shares or other
securities and ensure delivery of the certificates to the person entitled
thereto at his/her registered address.
• 72(1) After the commencement of this Act from a date notified by the
Commission, a company having share capital, shall have shares in
book-entry form only. (paperless, digital, electronic shares with CDC)

5. Shares certificate to be evidence
• Section 62 states that Shares certificate should be evidenced.
• Subsection (1) elaborate that A certificate, if issued in physical form
under common seal of the company or under official seal (which must
be facsimile/replica/copy of the company‘s common seal) or issued in
book-entry form, specifying the shares held by any person or shares
held in central depository system shall be apparent evidence of the
title of the person to such shares.

6. Further Issue of Capital
• 83(1) Where the directors decide to increase share capital of the
company by issue of further share capital, such shares shall be offered:
• (a) to persons who are members of the company in proportion to the
existing shares held by sending a letter of offer at the date of the offer.
• (b) subject to approval of the Commission, to any person, in the case of
public company on the basis of a special resolution either for cash or for
a consideration other than cash: the value of non-cash asset, service,
intellectual property shall be determined by a valuer registered by the
Commission.

7. Altering of Share Capital
85(1) A company having share capital may, if so authorized by its articles,
alter the conditions of its memorandum through a special resolution, so
as to:
(a) increase its authorized capital by such amount as it thinks expedient;
(b) consolidate and divide the whole or any part of its share capital into
shares of larger amount than its existing shares
(c) sub-divide its shares, or any of them, into shares of smaller amount
than is fixed by the memorandum
(d) cancel shares which have not been taken or agreed to be taken by any
person, and diminish the amount of its share capital by this amount

8. Management and
Administration
Part VII of Companies Act 2017

9. Outline
• Members of company
• Meetings -
• Directors – appointment , election , removal, power and functions

10. Members of a company
• Section 118 The subscribers to the memorandum of association are
deemed to have agreed to become members of the company and
become members on its registration and every other person-
• (a) to whom is allotted, or who becomes the holder of any class/kind
of shares.
• 119(1) Every company shall keep a register of its members

11. Meetings and Proceedings
• Statutory meeting of company
• 131(1) Every public company having a share capital shall, within a
period of one hundred and eighty days (180) from the date at which
the company is entitled to commence business or within nine months
(9m) from the date of its incorporation whichever is earlier, hold a
general meeting of the members of the company, to be called the
―statutory meeting
• 131(2) The notice of a statutory meeting shall be sent to the
members at least twenty-one days before the date fixed for the
meeting along-with a copy of statutory report.

12. Meetings and Proceedings
• Annual General Meeting
• 132(1) Every company, shall hold, an annual general meeting within
sixteen months from the date of its incorporation and thereafter
once in every calendar year within a period of one hundred and
twenty days.
• 132(3) The notice of an annual general meeting shall be sent to the
members and every person who is entitled to receive notice of
general meetings at least twenty-one days before the date fixed for
the meeting.

13. Quorum of General Meeting
• 135(1) The quorum of a general meeting shall be—
• (a) in the case of a public listed company minimum ten members
present personally, or through video-link who represent minimum of
twenty-five percent of the total voting power
• 137(1) A member of a company entitled to attend and vote at a
meeting of the company may appoint another person as his proxy to
exercise all or any of his rights to attend, speak and vote at a meeting

14. Power of Commission w.r.t. meetings
• Power of Commission to call meetings
• 147(1) If default is made in holding the statutory meeting, annual
general meeting, the Commission may require from directors to the
calling, holding and conducting of the meeting and preparation of any
document required with respect to the meeting.
• Filing of resolution
• 150(1) Every special resolution passed by a company shall, within
fifteen days from the passing thereof, be filed with the registrar duly
authenticated by a director or secretary of the company.

15. Appointment and Removal of Directors
• Ineligibility of certain persons to become director
• Section 153 define A person shall not be eligible for appointment as a director of a
company, if he
• (a) is a minor;
• (b) is of unsound mind;
• (c) has applied to be adjudicated/verdict/decision as an insolvent and his application
is pending;
• (d) is an undischarged/fully insolvent;
• (e) has been convicted/found guilty by a court of law for an offence involving moral
turpitude/conduct;
• (f) is not a member.

16. Minimum number of Directors of a Company
• 154(1) Notwithstanding anything contained in any other law for the time
being in force, / this law requires that:
• (a) a single member company shall have at least one director;
• (b) every other private company shall have not less than two directors;
• (c) a public company other than a listed company shall have not less than
three directors; and
• (d) a public listed company shall have not less than seven directors:
• Provided that public interest companies shall be required to have female
representation on their board as may be specified by the Commission.
• (2) Only a natural person shall be a director

17. Consent to act as director
• 167(1) No person shall be appointed or nominated as a director or
chief executive of a company, nor shall any person as proposed
director or proposed chief executive of any company, unless such
person or such other individual has given his consent in writing to the
company for such appointment or nomination.
• This consent shall also be filed with the registrar within fifteen days
thereof.

18. Provisions related to Appointment
• 157. First directors and their term.
• (1) The number of directors and the names of the first directors shall
be determined by the subscribers of the memorandum
• (2) The number of first directors may be increased by appointing
additional directors by the members in a general meeting. So, The
first directors shall hold office until the election of directors in the first
annual general meeting of the company.

19. Procedure for election of directors
• 159(1) the existing directors of a company shall fix the number of
directors to be elected in the general meeting, not later than thirty-
five days before convening of such meeting and the number of
directors so fixed shall not be changed except with the prior approval
of the general meeting in which election is to be held.
• (3) Any member who seeks to contest an election to the office of
director shall file with the company fourteen days before the date of
the meeting at which elections are to be held.
• a notice of his intention to offer himself for election as a director,

20. Term of office of directors
• 161(1) A director elected shall hold office for a period of three years
unless he earlier resigns, vacates office due to fresh election required,
becomes disqualified from being a director or otherwise ceases to
hold office.

21. Removal of directors
• 163 A company may by resolution in general meeting remove a
director appointed.
• Vacation of office by the directors
• 171(1) A director shall cease to hold office if—
• (a) he becomes ineligible to be appointed as a director on any one or
more of the grounds enumerated above;
• (b) he absents himself from three consecutive meetings of the board
without seeking leave of absence.

22. Proceedings of the board
• 176(1) The quorum for a meeting of board of a listed company shall
not be less than one-third of number of directors or four, whichever is
greater and the participation of the directors by video conferencing or
by other audio visual means shall also be counted for the purposes of
quorum.

23. Powers of Board of Directors
• The board shall exercise the following powers on behalf of the
company, and shall do so by means of a resolution passed at their
meeting, namely:—
• (a) to issue shares;
• (b) to issue debentures or any instrument in the nature of
redeemable capital;
• (c) to borrow moneys otherwise than on debentures;
• (d) to invest the funds of the company;
• (e) to make loans;

24. Powers of Board of Directors
• (f) Make sale, purchase or supply of goods or rendering services with
the company
• (g) to approve financial statements;
• (h) to approve bonus to employees;
• (i) to incur capital expenditure
• (j) to undertake obligations under leasing contracts
• (k) to declare interim dividend
• (l) to take over or acquire a company

25. Register of directors, officers
• 197(1) Every company shall keep at its registered office a register of
its directors and officers, including the chief executive, company
secretary, chief financial officer, auditors and legal adviser.
• 197 Every company shall file with the registrar a return in the
specified form, within a period of fifteen days from the date of
appointment of any person or any change among them and their
particulars.