CFAP-2: ADVANCED CORPORATE LAWS AND PRACTICES

Jargons/phrases/Latin terms commonly used in corporate law

Ab initio (from the beginning)

A director of any company shall not assign his office to any other person and any such appointment
shall be void ab-initio.

Bona fide (genuine, real, in good faith.

Provided that a subsidiary shall not be barred from dealing in shares of its holding company in the
ordinary course of its business, on behalf of its clients only subject to non-provision of any financial
assistance where such subsidiary carries on a bona fide
Business of brokerage.

Ex-parte (decided by a judge without requiring all of the parties to be present)

Where the respondent fails to file the written reply within the time prescribed, a report shall be submitted
by the Registrar of the Company Bench before the Court and the Court may pass necessary orders to
proceed ex-parte and announce the final order on the basis of the documents available on record.

Inter alia (among other things)

The company shall not invest in its associated company or associated undertaking by way of loans or
advances except in accordance with an agreement in writing and such agreement shall inter-alia include
the terms and conditions specifying the nature, purpose, period of the loan, rate of return, fees or
commission, repayment schedule for principal and return, penalty clause in case of default or late
repayments and security, if any, for the loan in accordance with the approval of the members in the
general meeting.

Ipso facto (by definition, by the fact itself)

The alternate director shall ipso facto vacate office if and when the director appointing him returns to
Pakistan.

Prima facie (self-evident, on the first appearance)

A certificate, if issued in physical form under common seal of the company or under official seal, which
must be facsimile 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 prima facie evidence of the title
of the person to such shares.

Mutatis mutandis (same effect)

The provisions of this section shall apply mutatis mutandis to the meeting of a particular class of
members as they apply to a general meeting of all the members.

Pari passu (at an equal ranking, same in the eyes)

The new shares issued by a company shall rank pari passu with the existing shares of the class to
which the new shares belong in all matters, including the right to such bonus or right issue and dividend
as may be declared by the company subsequent to the date of issue of such new shares.
Vice versa (other way round, the order being changed)

A company may by special resolution alter the provisions of its memorandum so as to

change the place of its registered office from one Province to another Province or Islamabad Capital
Territory and vice versa.

Ultra vires (beyond the powers, in excess of the authority conferred by law)

If any business or part of business carried on or any transaction made, by a company is ultra vires of
the company shall be an offence and every person who acted as a director or officer of the company
and is responsible for carrying on such business shall be liable to a penalty of level 3 on the standard
scale, and shall also be personally liable for the liabilities and obligations arising out of such business
or transaction.

Without prejudice (without detriment/harmful, without affecting that thing)

If a company licenced under section 42 or any of its officers makes default in complying with any of the
requirements of sections 42 and 43 or the rules or regulations or the terms or conditions to which the
licence is subject or any directions contained in a revocation order, it shall without prejudice to any other
action be punishable by a penalty not exceeding of level 2 on the standard scale.

Notwithstanding (despite, without being opposed, not considering)

Notwithstanding anything contained in any other law for the time being in force, no mortgage or charge
created by a company shall be taken into account by the liquidator or any other creditor unless it is duly
registered and a certificate of registration of such charge is given by the registrar.

Save as provided/save as otherwise provided (except, but, other than, reserve)

Save as provided in section 153, no person shall be appointed as a director unless he is a member of
the company.

Provided that voting through postal ballot shall be subject to the provision in the articles of association
of a company, save as otherwise provided in this Act.