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Comp Ord1984

Comp Ord1984

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Published by Zohaib Hussain
Pak Law
Pak Law

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Published by: Zohaib Hussain on Aug 25, 2009
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08/25/2009

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TheCompaniesOrdinance1984
(XLVII of 1984)
SECURITIES AND EXCHANGE COMMISSIONOF PAKISTAN
 
PREFACE
The corporate sector in Pakistan is governed by the Companies Ordinance 1984which was promulgated on 8
th
October 1984 and repealed the Companies Act, 1913.The avowed objectives of the Companies Ordinance 1984 were
inter alia
toconsolidate and amend the law relating to companies and certain other associationsfor the purpose of healthy growth of corporate enterprises, protection of investors andcreditors, promotion of investment and development of economy. The detailedprovisions of the Companies Ordinance, 1984 sought to meet these objectives andhave been amended and updated from time to time to keep in line with the changingcircumstances.The major amendments to the Companies Ordinance, 1984 were made through theFinance Act 1995, the Finance Act 1999, the Companies (Amendment) Ordinance,2002 and the Companies (Second Amendment) Ordinance, 2002. The Finance Act,1995 repealed the Capital Issues (Continuous of Control) Act, 1947, which gavediscretionary powers to the Federal Government to control the issue of share capitalby companies and made several consequential amendments in the CompaniesOrdinance 1984. Subsequently, the Finance Act 1999 allowed companies to issueshare capital of different kinds and classes in accordance with their memorandum andarticles of association. The Finance Act 1999 also allowed listed companies to buyback their own shares subject to prescribed terms and conditions.In 2002, the concept of “single member company” was introduced in the CompaniesOrdinance, 1984 through the Companies (Amendment) Ordinance, 2002. Theintroduction of this concept has facilitated sole proprietorships to obtain corporatestatus and has given them the privilege of limiting the liability of their proprietors. Theamendment has also been a positive step in encouraging the documentation of theeconomy. Also, through this Ordinance, the minimum number of members anddirectors of a non-listed public company was reduced from seven to three, theeligibility requirements for directors of listed companies were tightened and listedcompanies were required to appoint whole-time professionally qualified secretaries.The Companies (Amendment) Ordinance, 2002 also strengthened the financialreporting requirements of companies by mandating listed companies to publish andcirculate quarterly accounts and by reducing the period for holding the annual generalmeeting of a company from six months to four months from the close of the financialyear.
 
During 2002, the non-banking finance company (NBFC) regime was introduced in theCompanies Ordinance 1984 through the Companies (Second Amendment) Ordinance,2002. Accordingly, NBFCs have been allowed to function as companies, duly licensedby the Securities and Exchange Commission of Pakistan (SECP) with multi-tieredcapital requirements in accordance with the risks associated with their proposedbusinesses namely: asset management services, discounting services, housingfinance services, investment advisory services, investment finance services, leasing,and venture capital investment. The main objective behind the introduction of theNBFC concept was to consolidate the non-banking financial services sector and toallow multiple business activities under one umbrella for the ease and facility of thecustomers.In view of the significance of this law to the entire corporate sector and to encourageand facilitate its use by all stake holders, the SECP undertook the exercise of publishing an error free, consolidated andupdated version of the statute. The text anddate of deletion of the deleted provisions of the Companies Ordinance, 1984 has beenretained in the footnotes for ease of reference and the statute is being published inloose leaf form so that future amendments in the Ordinance may be convenientlyinserted.The SECP has taken the greatest care to ensure accuracy in the contents of thisversion, however we welcome any feedback from our readers as to any errors or omissions which may have been inadvertently overlooked.In conclusion, I would like to acknowledge and appreciate the efforts of theRegistration Department of the SECP in this regard. I would like to particularly extendmy gratitude to Mr. Muhammad Hayat Jasra (Executive Director), Mr. Nazir AhmedShaheen (Registrar of Companies), Mr. Tahir Manzoor (Deputy Director), Mr. Ejaz Alam Khan (Assistant Registrar), and Mr. Imtiaz Ahmed (Assistant) in compiling thisbook.I hope the readers will find our efforts useful.Chairman

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