BUSINESS FINANCE

Presented by: Nousheen Abbas Naqvi

 FINANCE
• Finance is the area of organization dealing
with monetary decisions. The primary goal of
Finance Manager is to maximize shareholder
wealth.
 Formation of Business

• Sole Proprietor ship

• Partnership

• Company
 Sole Proprietorship:
In this type the individual entrepreneur
supplies the entire capital. He organizes and
manages the business himself and takes the
entire risk and so it is called one man business.
 Partnership Organization
According to Partnership Act 1932, Partnership is
defined as, “the relation between two or more
persons who have agreed to share profit of a
business, carried on by all or any of them acting for
all.”
 Joint Stock Company

Joint Stock Companies are formed and registered

under the Companies ACT 2017

The joint stock company is a legal business owned by

the shareholders having limited /unlimited liability
and managed by an elected “Board of Directors”. The
shares are transferable.
Companies ACT 2017
 Kinds for the purpose of
registration

Company

Limited by Limited by
shares Guarantee

Association
Unlimited not for
profit
 Company

Single
Private Public
Member
 Private Company

Members Directors

At least 2 At least 2

Maximum 50
Public Company

Members

At least 3
 Single Member Company

Members Directors

Minimum & Minimum &

maximum 1 maximum 1
Procedure of Initial Public Offer (IPO) By
Public Limited Company
 Right
Further Issue of Shares Issuance

By notice
Shall be offered

specifying
Members

No.of
In proportion to the shares
Limited
existing shares held by entitled by
Time
each member each
member

Now directors may issue such shares as If offer is not accepted within limited
they may deem fit time it will be deemed to be declined
 Kinds and Classes of Share Capital

More than one kind of May have different

share capital classes

Authorized

A
Issued & Paid up

B
Redeemable

C
 Types of Financial Securities
• Debt Securities

• Equity Securities
 Corporate Sector in Pakistan
• The Corporate sector of Pakistan is an elite
business sector expanded in financial cities of
Pakistan.
• In Pakistan the apex body of corporate sector
is “Securities and Exchange Commission of
Pakistan”, which comes under the umbrella of
Government of Pakistan .
APEX BODY FOR CORPORATE
SECTOR
 Securities and Exchange Commission of Pakistan

• The Securities and Exchange Commission of

Pakistan (SECP) was set up in pursuance of the
Securities and Exchange Commission of
Pakistan Act, 1997.

• The SECP became operational in January 1999

and has come a long way since then. It was
initially concerned with the regulation of
corporate sector and capital market.
• Over time, its mandate has expanded to include
supervision and regulation of insurance companies,
non-banking finance companies and private pensions.

• The SECP has also been entrusted with oversight of

various external service providers to the corporate and
financial sectors, including chartered accountants,
credit rating agencies, corporate secretaries, brokers,
surveyors etc.
 Powers & Functions of SECP
• Regulating the issues of securities.

• Regulating the business of Stock Exchange/Commodity

and other security market.

• Prohibiting fraudulent and unfair trade practices relating

to securities market.

• Encouraging organized development of the capital

market and the corporate sector in Pakistan
• Hearing & deciding investor complaint against
persons involved in brokerage business for
violations of securities laws and rules.

• Regulating substantial acquisition of shares

and the merger and take-over of companies.
 Different Corporate Enterprises
• Public non-listed companies
• Private companies limited by share
• Public listed companies
• Foreign companies
• Welfare organizations and associations
• Trade companies limited by guarantee
• Unlimited companies
• Modaraba companies
• Investment advisors
• Close-end mutual funds
• Leasing companies
• Asset management companies
• Open-end mutual funds
• Credit rating companies
• Local general insurance companies
• Local life insurance companies
• Foreign general insurance companies
• Foreign life insurance companies