PRESENTATION OF BUSINESS LAW BBA-5 UNIVERSITY OF CENTRAL PUNJAB

1. KINDS OF COMPANIES
Under The Company Act, 1956 or special Act

2. Company
o Company basically means a group of persons
associated for any common object such as
business, charity, sports and research etc.
Characteristics of Company
 Separate legal entity
 Limited liability
 Perpetual Succession
 Common Seal
 Transferability of shares
 Separate property

3. KINDS OF COMPANIES

4. Basis of Legal Formation
1.Chartered Companies 2.Statutory (Ordinance)
Companies
• Formed by special orders of royal
family
• Formed by special orders of
president
• Formed by special act of PSR limit
Example: Chartered bank of England,
East India Company, etc
Example: State Bank of Pakistan,
National Bank, etc

5. Basis of Ownership
1.Govt (Public) Company 2.Private Company
• More than 50 % ownership is hold by
govt.
Examples: SBP,NBP,etc
• No. of Members
Unlisted Company: 3
Listed Company: 7
• Max. limit
No restriction
• Nature of Subscription
Can invite general public
• Transfer of shares
Transfer freely
• Certification
Must hold certification of
commencement
• More then 50% ownership hold by general
public
Examples: Unilever,Nestle,MCB.etc
• No. of Members
Atleast 2
• Max. limit
Not more than 50
• Nature of Subscription
Cannot invite general public
• Transfer of shares
Not transfer freely
• Certification
Not required

6. 1.Govt (Public) Company 2.Private Company
•Minimum subscription
Must raise minimum before
commencement certificate
• Prospectus
Free to invite public for subscription
• Filling the accounts
Accounts should file to registrar
•Auditor qualification
CA
• Directors
Unlisted 3
Listed 7
•Minimum subscription
Not required
• Prospectus
Cannot invite public for subscription
• Filling the accounts
Not required
•Auditor qualification
Not prescribed
• Directors
Atleast 2 (except single member company).

7. Basis of Registration
Listed/Registered Company Unlisted/Unregistered Company
• Securities are allowed to trade in stock
exchange
• State Bank provides loans or
compensations to these companies
• Securities are not allowed to trade in
stock exchange
• No loans or compensations provided by
State Bank
Example: MCB, Nestle, Bank of Punjab, etc Example: Cooperative banks( Azad Kashmir
Co-operative Bank Ltd. Or Baluchistan
Provincial Co-operative
Bank Ltd.), etc.

8. Basis of Nature of Liabilities
1.Company limited by
Shares
2.Company limited by Guarantee 3.Unlimited Company
• Liability based on the share
in the capital
• Liability based on the
contributes in the assets.
• Liability imposed at the winding
of the company
• Liability of the promoters
are limited
• Not found in Pakistan
• Ever partner’s liability is
unlimited
Example:
Suppose a person
has shares of Rs.5000 then
his liability will also be
Rs.5000.
Example:
Suppose there is a
company X made my members
A,B and C. They say that they will
contribute equal payments to
manage the liabilities. If limited
by guarantee, A,B and C will
contribute equally if the company
becomes insolvent because of
increased liability.
Example:
Suppose A and B
are two partners in the
company Z. Both partners
will have unlimited liabilities.
If one partner left, company
will become insolvent.

9. Basis of Shareholders
1.Holding
Company
2. Subsidiary
Company
3.Associated
Company
4.Association
Not-for- profit
• Holding more
than 50 perc. Of
the shares of
other company
• Right to elect
and appoint
directors
• Company
whose more than
50 perc. of shares
are hold by
another company
• Don’t have right
to elect and
appoint its
directors
•Company whose
20-50 % shares
are hold by
another company
•Registered by
special orders of
SECP
•Formed and
operates under
Companies
ordinance 1984
•Cannot use term
(Private) limited
or (Guarantee)
limited.
Example:
National
company hold
shares of
Panasonic
Company .Here
National is
Example:
Company a buys
70 shares of
company B. Here
company A is
holding company
and company B is
Example:
Asia Petroleum
limited(APL) has
49 perc. Share
holdings by
another company.

10. Others
Single Member Company
Private company having only one member
One person’s complete investment
Example: Synergy Business Consulting, etc
Foreign companies
A company incorporated outside the region of a
nation but has a place of business in the nation.
Example: KFC, McDonalds, PNG are US companies in Pakistan.