Presentation Slides, Companies Act 1984

1. COMPANIESACT 1984
 PRESENTEDTO: MUHAMMAD BRIG. SALEEM

2. TABLE
OF
CONTENT
Preliminary/Definitions/Incorporation of Companies
Memorandum Association
Article of Association
Management and Administration
Winding Up

3. Incorporation
of
Companies
 Any 7 or more person associated for any legal
purpose by subscribing these names, to a
memorandum of association and complying with the
requirements in registration may form a public
company or 2 or more person associated may form a
limited company.

4. Steps in the
formation of
companies
i. Preparation of memorandum of association
ii. Preparation of article of association
iii. Execution of Incorporation (if any)
iv. A legal document that has been signed off by people
necessary for it to become effective.

5. Memorandum
ofAssociation
 defined as the constitution or charter of the
company
 It is one the basic documents of company
 fundamental conditions upon which the company is
situated
 a public document every person who deals with the
company must have knowledge about the content

6. Clause of
MOA
 Name Clause:
 It states the name of the company. A company may choose any
name it may not resemble from any other company’s name. It
shouldn’t be undesirable and should not be permitted by any
law,
 Situation or registered office clause:
 The name of the state in which the company is being situated or
the name of the country. Within 30days of the incorporation
and within 15 days from its corporation the company must
registered its office. The verification must be done in the form of
domicile, and the domicile must have the place of the
registration mentioned on it.

7. Clause of
MOA
 Objects Clause:
 It defines the purpose on which the company is being set up, a
company isn’t allowed to perform certain actions if it isn’t
mentioned in the clause of the company. The object of the
company must be stated specifically not ambiguous. It must not
be illegal.

8. Clause of
MOA
 Liability Clause:
 Every company states the liability of its company. Now it
depends the whether the liability is shared by limited, unlimited
or guarantee.
 In case of company limited by share, if the shares are fully paid
then the liability of that particular stakeholder is nil. In case of
company unlimited by share, personal assets can be used. In
case of company guarantee by share, the memorandum must
show the amount each stakeholder is liable to pay at the time of
liquidification.

9. Clause of
MOA
 Capital Clause:
 All companies that are limited by share to mention the amount
of capital with which the company is formed. There is no legal
limit to it, the company may not issue share in case of the
exceeding amount mention in the clause.
 Association and Subscription Clause:
 The amount of the authorized shared capital, and the amount of
share taken by each member must be mentioned. The
memorandum must be signed in the presence of at least two
members/witness who will later on attest this, each subscriber
may take at least one share, each subscriber must write the
number of shares taken by him/her.

11. Article of
Association
 Contain the rules relating to the management of
internal affairs of a company & are basically for the
benefit of the shareholders
 Play a part subsidiary to the memorandum of
association (MOA)
 Cannot extend the objects as defined in the
memorandum

12. Obligations to
RegisterArticle
 PUBLIC COMPANY LIMITED BY SHARES- may
register articles (in case does not,TABLE “A” shall
apply)
 COMPANY LIMITED BY GUARANTEE/ UNLIMITED
COMPANY/PRIVATE COMPANY LIMITED BY
SHARES-must register articles along with the
memorandum at the time of registration

13. Obligation to
RegisterArticle
 Signed by each signatory of the memorandum in the
presence of at least one attesting witness, also
articles should not contain anything which is
against:
LAW OFTHE LAND
THE COMPANIES ACT
THE PUBLIC POLICY
ULTRAVIRESTHE MEMORANDUM

14. Contents of
Article of
Association
 Different classes of shares & their rights
 Procedure of issuing share certificates & share
warrants
 Alteration of share capital
 Borrowing powers of directors
 Voting rights of members
 Payment of dividends & creation of reserves

15. Limitations
Regarding
Article of
Association
 The alteration must not be inconsistent with the
provisions of the companies act or any other statue
 The articles must not be inconsistent with the
conditions contained in the memorandum
 Approval of Central Government is also required in
certain cases
 Conversion of public company into a private company
 Appointment or re-appointment of a director
 Increase in remuneration of a director

16. MANAGEMENT
AND
ADMINISTRATION

17. Management
and
Administration
 Registered Office
 A company shall, as from the day on which it begins to carry on
business, or as from the 30th day after the date of its
incorporation, whichever is earlier, have a registered office to
which all communications and notices may be addressed

18. Management
and
Administration
 Publication of Name by Limited Company:
 Every company is required to paint or affix, and keep painted or
affixed, its name on the outside of every office or place in which its
business is carried on, in a conspicuous position, in letters which
are easy to read.

19. Management
and
Administration
 Penalties for Non-Publication of Name:
If a limited company does not paint or affix, and keep painted or
affixed, its name in manner directed by this Ordinance, it shall be
liable to a fine which may extend to two hundred rupees for
every day and officer who willingly administrates the company
will be payable

20. Management
and
Administration
 Penalties for Non-Publication of Name:
 If any officer of a limited company, or any person on its behalf,
he shall be liable to a fine which may extend to two thousand
rupees, and shall further be personally liable to the holder of
any such bill of exchange, promissory note, cheque or unless
the same is duly paid by the company.

22. WindingUp
 The existence of a company can be terminated by means of
winding up and the process in which company is dissolved is
known as winding up of a company
 Winding up of a company is proceeding in which the co business is
closed down sell of its asset and creditors are paid, the balance of
asset are distributed to the members

23. Modes of
WindingUp
 There are 3 different modes of winding up of a
company
 1: compulsory winding up
 2: voluntary winding up
 3: winding up under supervision of court

24. Compulsory
WindingUp
 Two things must be shown before court will make a winding order
on petition
 1-That the petitioner had the right a present the petition.
 2-That on the ground set out is the act as justifying.

25. Compulsory
WindingUp
Section 305 of companies ordinance that a company may be wound
up by the court on following ground are there:
 1- if the company has, by special resolution, resolved that the
company should be wound up by the court
 2- If the company is unable to pay its debts.
 3- Company does not commence its business within a year from its
incorporation, or suspend its business for a whole year.
 4-When period fixed for duration o the company by memorandum or
article expires or if any event occurs, the occurrence of which the
memorandum or articles provide that the company is to be dissolved
 5- Court is of opinion that it is just and equitable that the company
should be wound up
 6-The Company has being used for unlawful purposes or any purpose
prejudicial to in compatible with peace, welfare, security, public order,
good order morality.
 7- Company is used of act against the security of the nation.
 8- If the company ceases to have a member.

26. Voluntary
WindingUp
 It means winding up by members or creditors of company without
interference of court.
Resolutions of winding up of a company:
 Ordinary
 Special
 Ordinary:
 It is passed whenAOA provides that the company is wound up
when the specified period elapsed
 Special:
 It requires no ground for winding up and is used in any other case
such as a solvent liquidator.

27. Voluntary
WindingUp
under
supervision of
court
 It may be affected under the supervision of court where an
application to that effect is made by creditor or a contributory or
the company or the liquidator and court makes an order that
voluntary winding up should continue subject to the supervision of
court.
 Such an order is passed by court where:
 The resolution of winding up was obtained by fraud
 The rules relating to winding up order have not been observed
 The liquidator is prejudicial or is negligent in collecting the assets.