Business & Labour Law

COMPANIES ORDINANCE 1984

Companies Ordinance 1
INTRODUCTION
 The Pakistan government appointed a
Company Law Commission in 1959
 The report of the above Commission was

submitted in the year 1960, but its contents

were made public in 1972
 The Companies Act, 1913 was replaced by

the Companies Ordinance, 1984

 This Ordinance has been amended time to

time

Companies Ordinance 2
OBJECTIVES OF THE ORDINANCE
 Consolidation of the Law relating to
Companies and certain other Associations.
 Ensuring healthy Growth of Corporate

Enterprises
 Protection of Investors and Creditors
 Promotion of Investment and Development of

Economy

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IMPORTANT

TOPICS OF THE
ORDINANCE
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Formation of a company
 Registration of a Private/Public Company
 Application for availability of name
 Documents required for registration of

private company
 Four copies of memorandum and articles of

association, signed by each member in the

presence of a witness, one copy special
stamp pasted, copy of N.I.C.’s of promoters

Companies Ordinance 5
Memorandum of Association
 Document that regulates a firm's external
activities and must be drawn up on the
formation of a registered or incorporated firm
 It states the firm's
 (1) objectives
 (2) authorized share capital
 (3) whether liability of its members is limited

by shares or by guaranty
 (4) what type of contracts the firm is allowed

to enter into

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Articles of Association
 The internal 'rule book' that, according to corporate
legislation, every incorporated firm must have and
work by
 it is a contract (1) between the members
(stockholders, subscribers) and the firm and (2)
among the members themselves
 It sets out the rights and duties of directors and
stockholders individually and in meetings

Companies Ordinance 7
Prospectus
 It is a legal document that institutions and businesses use to

describe the securities they are offering for participants and

buyers.
 A prospectus commonly provides investors with material

information about mutual funds, stocks, bonds and other

investments
 prospectus must disclose essential information such as:

◦ firm's objectives
◦ primary business activity
◦ current financial position
◦ projected financial statements
◦ foreseeable risks to the firm
◦ offering price on the stock (shares)

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Winding up a company
 When a company ceases to exist and its
property is administrated for the benefits of
its creditors and member
 Modes of winding up:
 Compulsory winding up by the court
 Voluntary winding up
 Winding up under the supervision of the

court

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Case Study!!!

Prosperity Weaving Mills Limited

Companies Ordinance 10
Corporate Profile
 Established in 1993
 The mill comprises a total of 324 looms of

various widths
 Fabric production is over 55,000,000 linear

meters annually
 They produce up to 800 thread count (T-800)

Companies Ordinance 11
Company & Companies Ordinance
 Keeping in the view, the provisions of Section
37, the name of the company is selected
which is “PROSPERITY WEAVING MILLS
LIMITED”
 The registered office of the company is

situated in the Province of Punjab.

 The Company is Public Company within the

meaning of clause (30) of subsection (1) of

Section 2 of the Ordinance.

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 Company got its Certificate of Incorporation
on 21 November 1991 by paying Rs.
1,53,560/_ (Section 32).
 Company got its Certificate for

Commencement of Business under Section

146(2) on 9th December 1991 by paying Rs.
60/_
 Company registered its Memorandum of

Association and Article of Association under

Section 30

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 Company issues its Memorandum of
Association keeping in the view of Section 16
 Company issued its Article of Association
under Section 26
 Company issued its Prospectus which is Public
Document under the Section 52 & Section 53
 The Board may not refuse to register any
transfer of dully paid up shares except in
accordance with the provisions of Section 76,
77 and 78 of the Ordinance.

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 to the provision of Section 151 of the
Ordinance the transfer books and the register
may be closed during such times as the Board
may think fit, not exceeding on the whole
forty five days in each year and not exceeding
30 days at a time.
 The Board appointed a Chief Executive, as

required by Section 198 to 203 of the

Ordinance.

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 Subject to the provisions of Section 158, the
Annual General Meeting of the Company shall
be held once at least every calendar year at
such time and place as may be determined by
the Board, provided that no greater interval
than 15 months shall be allowed to elapse
between two such General Meetings.
 The Directors elected by the shareholders in

accordance with Section 178 of the

Ordinance.

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 The Board is cause to kept proper books of
accounts as required under Section 230 of
the Ordinance
 Subject to the provisions of the Ordinance,

any dividend may be paid by cheque or

warrant is sent through post to the registered
addresses of the members.
 Auditor appointed and their duties regulated

in accordance with Section 252 of the

Ordinance

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Recommendations
 Apply the provisions of the Ordinance more strictly.
 As some of the provisions of the Ordinance are

changed time to time, some deductions and some

additions in the provisions are done by the
Ordinance makers which are issued as notifications.
The Company must take the action regarding the
new provisions and immediately apply them and
leave the old ones.
 The Company must have a person who is related to

the Ordinance only and revise company conditions

and article time to time to keep them update with
the updated Ordinance

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Conclusion
 Companies ordinance is the most important
thing for kind of companies
 In this company, all the activities are done

exactly according to Companies Ordinance

Companies Ordinance 19