RIPHAH INTERNATIONAL UNIVERSITY

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Corporate Framework
Workshop Organized by

Riphah Business Resource Centre

1

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WINDING UP
 WINDING

UP: A process by which a company is UP:

dissolved (i.e. its life is put to an end-(a.k.a Liquidation) (i. end-(a.

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 PROCESS OF EWINDING UP: Assets of the company are UP:

disposed off, debts of the company are paid off and surplus, if any, is distributed among the shareholders in proportion to their holdings. holdings.
 EFFECTS

OF WINDING UP: Once the company is UP:

dissolved/liquidated, it ceases to exist and thereafter cannot sue or be sued in its own name. name.

WINDING UP
LIQUIDATOR: LIQUIDATOR: A person appointed to carry out the process of winding up. up.

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OFFICIAL LIQUIDATOR: A liquidator appointed in LIQUIDATOR: case of winding up by the court. He acts under court. the supervision of the court through a defined reporting system. (Official liquidator neither system. resign nor can be removed till conclusion of winding up, except in case of disability)

MODES OF WINDING UP

The winding up of the company can either be: be:

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 By the court  Voluntary

- by members - by creditors)
 Subject to supervision of the court

WINDING UP BY COURT
Winding up court is called Compulsory winding up and may be order on any of the following grounds: grounds:

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 Members resolve, by Special Resolution,

that the

company be wound up by court; court;

 Default in delivering statutory reports, holding of

statutory meeting or holding of two consecutive AGMs; AGMs;

 The Company is unable to pay debt; debt;  The Company ceases to have any member; member;

WINDING UP BY COURT
 The Company does not commence business within

one year from incorporation or suspends business

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for a whole year; year;

 Number of members fall below the minimum level; level;  The Company indulges in fraudulent activities or

carries out unlawful business or takes up business not authorized by the Memorandum; Memorandum;
 If in the opinion of the court, it is just and

equitable to wind up the company. company.

WINDING UP BY COURT
PERSONS COMPITENT TO FILE PETITION

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 The Company by passing Special Resolution; Resolution;  Creditor or Creditors; Creditors;  Any Contributor or Contributors; Contributors;  Registrar of Companies; Companies;  SECP or a person so authorized by the Commission

WINDING UP
VOLUNTRY WINDING UP
Voluntary winding up may be undertaken: undertaken:
 On the expiry of the fixed period of business or on

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happening of an event which have already been provided in the Articles/Memorandum; Articles/Memorandum;
 On passing a Special Resolution stating that the

Company be wound up voluntarily. (Winding up voluntarily. commences with passing of resolution but business activities may continue for beneficial liquidation)

WINDING UP
WINDING UP UNDER COURT SUPERVISION

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A court, by its own motion or on an application by an entitled person, may order that voluntary winding up shall continue, subject to supervision of the court. court. Such an order will create jurisdiction of the court over law suits and other legal proceedings of the winding up. up.

CONSEQUENCES OF WINDING
 THE COMPANY: The Company continues to exist COMPANY:

during winding up but its management is carried

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out by the liquidator till final winding up; up;

 SHAREHOLDERS: A new liability as contributor SHAREHOLDERS:

comes into existence. Transfer/ alteration of shares existence. after the order of the court is void, unless allowed by the liquidator; liquidator;

CONSEQUENCES OF WINDING
 CREDITORS: Cannot file or continue suits against the CREDITORS:

Company unless allowed by the court; cannot proceed court;

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with the execution of a decree even if obtained prior to liquidation order; order;

 MANAGEMENT: On appointment of liquidator, all powers MANAGEMENT:

of directors, chief executive and other officers cease. ( cease. except relating to giving notices of winding up and

appointment of liquidator)

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THANK YOU
Presented by

Khurram Khan
DirectorDirector- RBRC

CORPORATE FRAMEWORK
HISTORY OF CORPORATE LAWS IN PAKISTAN OBJECTIVES

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1. Healthy Growth of the Corporate Enterprises 2. Protection of Investors and Creditors 3. Promotion of Investment 4. Development of Economy

HISTORY OF CORPORATE LAWS IN PAKISTAN (Contd)

LAW COMPANIES ACTS, 1913 REGULATOR REGISTRAR JOINT STOCK COMPANIES

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COMPANIES CAPITAL ISSUE ACT, 1947

CONTROLLER OF CAPITAL ISSUE

COMPANIES ORDINANCE, 1984

CORPORATE LAW AUTHORITY

COMPANIES

CORPORATE LAW AUTHORITY

(ISSUE OF CAPITAL) RULES, 1996

HISTORY OF CORPORATE LAWS IN PAKISTAN

LAW CENTRAL DEPOSITORIES ACT, 1997

REGULATOR CORPORATE LAW AUTHORITY SECP SECP

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COMMISSION ACT, 1997 COMPANIES (AMENDMENTS) ORDINANCE, 1984