Lecture 14:

Latin and Italian Maxium

Nemo - dat- quat - non- habent:
“Noone can transfer better title than that he himself can.”
It explains that only the owner of property himself can sell his own property.

A general rule of transfer of ownership:

A non-owner of goods can not pass good title to the buyer even though he has bought
them in good faith for the price.

For example in the case of fraud buyer has good faith and is ready to pay the right price whereas
the seller is doing fraud. It is one-sided.

Exception:
● Authority of non-owner to sell the goods.
For example, A, B and C were together. It's C’s car and he wants to sell it. But A offered B on
behalf of C to buy it. Though A is not the owner but C has given him the authority to sell it to
any other 3rd party. As he can be his agent or has been given the power of attourney.

● Sale by Meerchantile or commercial agent.

‘Contract of Agency’. It is another exception whereby the agents are allowed to sell company
goods.

● Sale by joint owner.

For example, X, Y and Z together are owners of a property. Z sold the property to H.
“ Where there is an agreement that anyone owner can sell without seeking, consulting the
other owners”

● Person in possession of goods under the voidable contract.

Before the contract is voidable, if a person sells goods, it is considered lawful and
non-challengable.

● Buyer in possession of goods before a sale can sale to 3rd Party.

For example, a person has 100 goods and sold 50. The next 50 are sold to 3rd party and payment
is paid on credit.

● The seller is in possession of goods after the sale.

There is a promise to sell a property to a person A, but you sell it to another B due to a better
price. This act is considered lawful.
 ● Unpaid seller in possession of goods.
Where there was a promise or contract done but the buyer had not paid on the fixed date. Due to
this non-payment, he can sell it to another person.

● Finder of lost goods.

If the finder of a lost good, wants to sell the good, he can sell it legally.

● Pledge of a good.
A pledgee can sell a good when debt is not paid or promise not performed.

Rules of an auction for sale;

“ Auction is a public event at which things are sold to the person who
offers the most amount for them.”

Auctioneer:
A person who sells and offers for sale of goods where the person (from the audience)
becomes purchaser being the highest bidder.

Bidder:
A person who bids in an auction sale.

Bid:
An offer to buy at a given price.

Rules of the auction:

● A separate contract for each lot, which includes everything sold, if A buys different
products then different contracts. But if he buys 100 cars in one bid then a single contract
is made.
● Completion of bid:
The sale transaction completes when the auctioneer falls the hammer.

Understanding:
The maxim states that the owner of a property can better sell the item himself, to another
person. But there are some exceptions to it, for instance where his friend has been given authority
or a third-party agent is hired to do so. Other exceptions include joint ownership, finder of lost
items and pledge selling it due to non-payment of debt.
The rules of the auction (an event of selling goods to the audience present) state
that the bidder ( the buyer from the audience, who offers a price), offering the highest bid
(price), is sold the item, which is completed after the sale transaction happens. A contract
is made for every different bid, but a single bid with multiple items in it will have a single
contract.

Lecture 15:
The Company Ordinance 1984:
Was presented in 1984 and implemented on 1st Jan 1999.
Basic Element
Its essential element is defining the registration process of a company in the Stock Exchange
Commission of Pakistan (SECP). SECP also determines the fee for the registration of every
company, which varies for every company being registered.

Promoters:
Promoters are the people who take part in the formation of the company, during its 1st
stage. They prepare the legal documents and take steps for the registration of the company. It
includes all legal formalities and drafting of other important documents necessary for its
registration.

Essentials:
The essentials for the registration include name, address and liability.

Memorandum of Association:
This document is the backbone of the formation and registration of the company. It is the
charter of the company that contains all the basic conditions, thus playing a vital role in the
whole process.

Stepwise process of company registration

The following are the steps of the company registration and formation.
1. Documents namely “Article of Association”(AOA):
These are the regulations that govern the internal management affairs of the
company.
Memorandum of Association (MOA):
AOA is it's subordinate. MOA shows the amount of share capital that has been
issued. The capital issue is the equity that the company needs to work and exist.
The right of the shareholders are:
● The company should have written rules to issue shares
● It should have a procedure to make a ‘call on share’. (Which is the
advertisement in the newspaper for the issuance of shares).
● It should have rules for the appointment of directors, like Managing
Director (MD). That would include their powers and liabilities.
● It should have rules regarding the winding up of the company.
 After having both the above-said documents a company can submit a registration
form to the SECP. The registration is the next stage.

2. Incorporation:
This is also known as registration or oblique.
To complete this step, the following documents need to be submitted with SECP,
to register the company.
● MOA
● AOA
● Receipt of the company name approved
● Nominal capital
● Qualification of shares (shares that have been approved)
● Share of common stock that the directors hold.

The following document related to the director needs to be submitted.

● Declaration: This is every kind of property that is available for the institutions to
investigate.
After the declaration, if the registrar is satisfied with the documents provided, he
will issue a certificate called a “ Certificate of incorporation”. After the issuance of
this certificate, a private company can start its work within minutes.
Whereas for a public company, a certificate called “Certificate of
Commencement” will be issued, for which the company has to wait a while after
submitting the documents mentioned in step 4.

3. Issuance of Prospectus:
After the receipt of the ‘Certificate of incorporation’, the promoters issue the
prospectus which has the application form for buying the shares attached to it along with
pictures in it.

4. Public Company
A public company has to receive the certificate of commencement on the basis of
submitting the following documents:
● Prospectus
● Setting the minimum subscription
● It has to mention the directors' share.
After the verification of all the above-mentioned documents, the registrar will issue the
final certificate of Commencement. After this, the public company can start working.
Understanding:
The company ordinance 1984 states the registration of a private and public company in
SECP. This happens with the help of promoters, which help in legal work for the registration of
the company. For this process, an Article of association (AOA) and a Memorandum of the
association (MOA) are required. They give the rules for working of the company and about the
issuance, sale and transfer of stocks. Then the receipt of the company name, which is registered
with SECP, after a given fee, and the declaration of director's property is required. After
presenting these documents, if the registrar is satisfied, he issues the ‘Certificate of
Incorporation’ to the private company, where after this they can start their operations. Whereas
the public company has to further issue the prospectus, set the minimum subscription and show
directors' share. After this, if the registrar is satisfied he will issue a ‘Certificate of
commencement’, after this they can start their operations.