This document discusses the key aspects of forming a company under the Companies Ordinance 1984 in Pakistan. It defines subsidiary and holding companies, outlines the requirements for forming a public or private company according to Section 17, and describes the steps in company formation including preparing the memorandum of association and articles of association, executing pre-incorporation contracts, and registering the company. It also explains the registration process and requirements and provides details on the content that must be included in the memorandum of association for companies limited by shares, limited by guarantee, or unlimited companies.

1. By
Brig (R) Muhammad Saleem SI(M)

2. Subsidiary Companies
 A company is subsidiary of another
company if that other company directly or
indirectly controls, beneficially owns or
holds more than 50% of its voting
securities or other wise has power to elect
and appoint more than 50% of its voting
securities or other wise has power to elect
and appoint more than 50% of its directors
and that other company is called as a
holding company.

3. Holding Company
 For the purpose of companies ordinance
1984 a company shall be deemed to be
another's holding company if, but only if,
that other is its subsidiary
Section 3(2)

4. Formation Of A Company
 Section 17 of the Companies Ordinance
1984 provides that any 7 or more
persons associated for any lawful
purpose by subscribing there names to
a memorandum of association and
complying with the requirements in
respect of registration may form a public
company and any 2 or more persons so
associated may form a private limited
company

5. Steps In The Formation Of A
Company
 Preparation of memorandum of
association
 Preparation of article association
 Execution of pre-incorporation contracts,
if any
 Registration of company
 Issue of a prospectus or a statement in
lieu of prospectus

6. Registration Of The
Company
 The registration and incorporation of a company is
the 4th stage in the formation of a company
 Person wishing to register the company must file
with the registrar, joint staff companies the following
documents
 Memorandum of association
 Article of association
 List of persons consented to become directors
 Statutory declaration by these persons or an officer of the
company that requirements of the companies ordinance
1994 as to registration have been complied with
 Written consent of the director to act This how ever does
not apply to private company
Section30(2),Section 184

7.  There after the prescribed fee for the
registration has to be paid and the registrar
then enters the name of the company on the
registers of companies and issue the
certificate of incorporation, section 32(1)
 The company then comes into existence as
a legal person , section 32(2)

8. Memorandum Of
Association
 In case of company limited by share the
memorandum must state
 Name of the company
 Province in which the registered office of the
company is situated
 Object of the company and terror tries to which
they extend
 Liabilities of companies is limited
 Amount of share capital with which company
proposes to be registered and the division
thereof into shares of a fixed amount
 Association clause and subscription
Section 16

9.  In the case of the company limited by guarantee the
memorandum must state
 Name of the company with parentheses and words “
(guarantee) limited “ as the last words of its name
 Province in which the registered office of the company is
situated
 Object of the company and terror tries to which they
extend
 Liability of the members is limited
 Each member undertakes to contribute to the assets of
the company in the event of its being wound up while he is
a member or with in 1 year afterwards, for the payment of
the debts and liabilities of the company contracted before
he seizes to be a member
 If the company has a share capital the amount if share
capital and division thereof into shares of a fixed amount
 Association clause and subscription
Section 17

10.  In the case of unlimited company the
memorandum must state
 The name of the company
 Province in which the registered office of the
company is situated
 Object of the company and terror tries to
which they extend
 If the company has a share capital, the
association clause and subscription
Section 18

11. Article Of Association
 The articles are the rules made by the
company for the internal management of
its affairs and for carrying out the objects
of the company

12. Difference Between
Memorandum And Articles
 Memorandum is the area beyond which the company
cannot go whilst the articles of the by laws or regulations
for the Government of the share holders and the company
 Memorandum cannot be altered except to the extent
provided for by section 21 of the ordinance whilst the
articles can be altered to any extent
 Articles are subordinate to the memorandum and thus
they cannot alter or control the memorandum. However if
there is any ambiguity in the terms of the memorandum,
both should be read together for the purpose of explaining
it
Ashbury Rly Carriage Company verses Richie(1878)
H.L.653
Shyam Chand versus Calcutta Exchange Association Air
1949 CAL.337