Single Member Company Rules 2003

Applicability of Rules
A company incorporated as single member company; and A private company limited by shares becoming a single member company after complying with the requirements of these rules.

Restriction on Single Member Company

Maximum Single Member & Single Director

Definitions
Alternate Nominee Director u/s. 2(a) Nominated by single Member Incase of non-availability of nominee director Nominee Director u/s. 2(c) Nominated by single Member To act as director in case of death of single member Sole Director u/s. 2(h) The director of a single member company who is for the time being the only director

Formation of a Single Member Company (SMC)

A single person may form a single member company in accordance with the relevant provisions of Companies Ordinance 1984 & Single Member Companies Rules 2003. In application, for formation of a SMC, to registrar such person shall file all the necessary documents as are required for registration of a private Company. In addition, such person shall also file; o A Nomination (in Form S1) of at least two individuals, in case of his death, to act as Nominee Director Alternate Nominee director o Company Secretary can not be nominee director Transfer of Membership of SMC o Company shall file a nomination Form S1 o Within 15 days from such transfer Originally incorporated SMC, or converted (before commencement of these rules) o File nomination within two months of commencement of rules

Change of Status of a Single Member Company

1. In case of transfer of shares or further allotment a. Special Resolution for change of status Within 30 days b. Alter its articles c. Appoint and elect additional directors within 15 days of passing of Special Resolution d. Notify appointment Form 29 within 14 days 2. In case of death of Single Member a. Be wound up b. Converted into Private company i. Nominee director shall transfer shares to legal heirs within 7 days ii. Special Resolution for Change of Status to Private Company

iii. Alter its articles within 30 days of transfer of shares iv. Appoint and Elect additional Directors within 14 days of Special Resolution v. Notify appointment Form 29 within 14 days of appointment c. Operation of Law i. Transfer shares within 7 days (order of Court or Authority) ii. Special Resolution for change of status iii. Alter its articles iv. Appoint additional Director(s) v. Notify appointment Form 29 Persons becoming members due to transfer, transmission or further allotment of shares shall pass a special resolution to make alteration in articles Appoint additional Director(s) Where a single member company converts into a private company it shall File a Notice form S2 with registrar Within 60 days from date of passing of resolution

Meetings of Directors & Members

Any provision of the Ordinance or articles of the company shall be deemed to be satisfied if the decision is taken by the single member or sole director; and is drawn up in writing and recorded in the minutes book. Which requires any matter to be decided by directors or members requires any matter to be decided by resolution

Company Secretary
Appointment o Appointed within 15 days of incorporation; becoming a SMC; or Office of company secretary falling vacant o Notify appointment within 14 days Form 29 o Sole director can not be a company secretary Qualification: Person holding bachelor degree from HEC recognized University Duties o Attend all proceedings of general Meetings & Meetings of director(s) o Cause accurate summary of the minutes along with name of those participating in minutes book o Inform the registrar about the death of the single member

Transfer of Management to Nominee director

The single Member shall nominate two individuals One who shall become nominee director, in case of death of single member Other shall become alternate nominee director to work as nominee director in case of nonavailability of the nominee directors

Duties of Nominee director

Manage affairs till the transfer of shares to legal heirs Inform/Provide the registrar o death of single member o particulars of legal heirs

o in case of impediment report circumstances seeking directions Form S3 transfer shares to legal heirs call the general meeting of the members to elect directors

Impediment due to transfer of shares, election of directors etc

Registrar concerned shall call, or direct nominee director to call the meeting of legal heirs to o Elect directors o Making alteration in the articles o Any ancillary and consequential directions as he thinks expedient

Requirements for Company becoming a single member company

Special resolution for change of status Alteration in its articles Obtain approval of commission Form S4 not later than 30 days from the date of special resolution for change of status Upon approval of commission o Company shall transfer shares in the name of single Member within 15 days of approval o Notify Change in Board of Directors Form 29 within 14 days of transfer of shares o File with registrar Certified copy of Order (approval) Notice Form S5 Nomination of nominee directors Form S1

Pattern & Style of Name of SMC

XYZ (SMC-Private) Limited shall be the pattern, style and form part of Name of every Single Member Company Change of Status o Into SMC Registrar shall issue Certificate Form S6 (SMC-Private) Limited shall form part of Name o Into Private Company Registrar shall issue Certificate Form S7 Omit SMC- from name

Benefits of being SMC

Separate legal entity Can own both movable & immovable property Limited liability Perpetual existence There can exist a relation of principle and agent between company and single Member company

Regulations of SMC from Nazir Ahmed Shaheen