Assignment

TOPIC: Law of Company (Memorandum & AOA)

1. Under the provisions of the Companies Ordinance, 1984 briefly describe the term ‘Body

corporate’.

Answer:

 In this Ordinance, unless there is anything repugnant in the subject or context,--
 
(1)    "articles" means the articles of association of a company as originally framed or as
altered in accordance with the provisions of any previous Companies Act, or of this
Ordinance, including, so far as they apply to the company, the regulations contained in Table
A in the First Schedule;
(2)    "associated companies" and "associated undertakings" mean any two or more companies
or undertakings, or a company and an undertaking, interconnected with each other in the
following manner, namely:-
(i)     If a person who is the owner or a partner or director of a company or undertaking, or
who, directly or indirectly, holds or controls shares carrying not less than twenty per cent of
the voting power in such company or undertaking, is also the owner or partner or director of
another company or undertaking, or, directly or indirectly, holds or controls shares carrying
not less than twenty per cent of the voting power in that company or undertaking; or
(ii)    if the companies or undertakings are under common management or control or one is
the subsidiary of another; or
(iii)    if the undertaking is modaraba managed by the company;
and a person who is the owner of or a partner or director in a company or undertaking or, who
so holds or controls shares carrying not less than ten per cent of the voting power in a
company or undertaking, shall be deemed to be an "associated person" of every such other
person and of the person who is the owner of or a partner or director in such other company or
undertaking, or who so holds or controls such shares in such other company or undertaking:
Provided that shares shall be deemed to be owned, held or controlled by a person if they are
owned, held or controlled by that person or by the spouse or minor children of the person: 
Provided further that - 
(i) directorship of a person or persons by virtue of nomination by the Federal
Government or a Provincial Government or a financial institution directly or
indirectly owned or controlled by such Government; or
(ii)    shares owned by the National Investment Trust or the Investment Corporation of
Pakistan or a financial institution directly or indirectly owned or contro1led by the Federal
Government or a Provincial Government or shares registered in the name of a central
depository, where such shares are beneficially owned by the central depository.
shall not be taken into account for determining the status of a company, undertaking or person
as an associated company, associated undertaking or associated person;
2. A company duly registered under the Companies Ordinance, 1984 is a separate legal

entity and a distinct person from the shareholders. Do you agree? Elaborate.

Answer:

Yes I do agree the modern company is a creature of the state with corporate legal personality

derived from the state through the process of incorporation. Once incorporation takes place, a

legal person is created. Status as a legal person is different to the type of sociological

personality that a group of individuals may develop organically that is recognized by the law;

it also means corporate legal personality is more significant than just a shortcut mechanism to

describe a collective of individuals or a set of characteristics. This article focuses on the

source of corporate legal personality, applying an historical lens to show that the status of a

company as a legal person or persona fact is of long standing. Nineteenth century general

incorporation statutes changed the process for acquiring corporate legal personality, but did

not alter the underlying fact that corporate legal personality remained a concession of the

state.

3. Under the provisions of the Companies Ordinance, 1984 list the circumstances under

which Khizar Limited may be deemed to be the subsidiary of Mehzar Limited.

Answer:

4. State the powers of the registrar with respect to seizure of books and documents of a

company as specified under the Companies Ordinance, 1984.

Answer:
It is expedient to reform company law with the objective of facilitating corporatization and

promoting development of corporate sector, encouraging use of technology and electronic

means in conduct of business and regulation thereof, regulating corporate entities for

protecting interests of shareholders, creditors, other stakeholders and general public,

inculcating principles of good governance and safeguarding minority interests in corporate

entities and providing an alternate mechanism for expeditious resolution of corporate

disputes and matters arising out of or connected therewith; and whereas the Senate and the

National Assembly are not in session and the President is satisfied that circumstances exist

which render it necessary to take immediate action; now, therefore, in exercise of powers

conferred by clause (1) of Article 89 of the Constitution of Islamic Republic of Pakistan, the

President of the Islamic Republic of Pakistan is pleased to make

5. State whether the following statement is true or false that “Every limited company has to

write (Private) with its name.”

Answer:

True