Name:Ayesha waris

Roll.no:mbf1800364
QUESTION:1
1. Articles:
“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. Chief Executive:
“ In relation to a company means an individual who, subject to the control and
directions of the directors, is entrusted with whole, or substantially the whole, of the
powers of management of the affairs of the company, and includes a director or any
other person occupying the position of a chief executive, by whatever name called,
and whether under a contract of service or otherwise”
3. Commission:
“ Means the Securities and Exchange Commission of Pakistan established under
section 3 of the Securities and Exchange Commission of Pakistan Act, 1997”
4. Financial Year:
“ In relation to anybody corporate, means the period in respect of which any profit
and loss account or the income and expenditure account, as the case may be, of the
body corporate, laid before it in general meeting, is made up, whether that period is a
year or not.”

5. Private Company:
“Private company means a company which, by its articles
A.Restricts the right to transfer its shares, if any
B.Limits the number of its members to fifty not including persons who are in the
employment of the company; and
C.Prohibits any invitation to the public to subscribe for the shares, if any, or
debenture of the company.”
6. Subsidiary company and Holding Company
Meaning of "subsidiary" and "holding company".-
(1) For purposes of this Ordinance, a company or body corporate shall be deemed
to be a subsidiary of another if,
(a) that other company or body corporate directly or indirectly controls, beneficially

1
owns or holds more than fifty per cent of its voting securities or otherwise has power
to elect and appoint more than fifty per cent of its directors; or
(b) the first mentioned company or body corporate is a subsidiary of any company
or body corporate which is that other's subsidiary; 1 [Provided that where a central
depository holds more than fifty percent of the voting securities of a company, such
company shall not be deemed to be a subsidiary of the central depository save where
such voting securities are held beneficially by the central depository in its own
behalf.]
(2) For the purpose of this Ordinance, a company shall be deemed to be another's
holding company if, but only if, that other is its subsidiary.
6. Special resolution:
“Special Resolution means a resolution which has been passed by a majority of not
less than threefourths of such members entitled to vote as are present in person or by
proxy at a general meeting of which not less than twenty one days’ notice specifying
the intention to propose the resolution as a special resolution has been duly given:
Provided that, if all the members entitled to attend and vote any such meeting so
agree, a resolution may be proposed and passed as a special resolution at a meeting of
which less than twenty- one day notice has been given.”
7. “Member
“ Means, in relation to a company having share capital, a subscriber to the
memorandum of the company and every person to whom is allotted, or who becomes
the holder of, any share, scrip or other security which gives him a voting right in the
company and whose name is entered in the register of members, and, in relation to a
company not having a share capital, any person who has agreed to become a member
of the company and whose name is so entered.”
8. “Schedule Bank”
Has the same meaning as in the State Bank of Pakistan Act, 1956
(XXXIII of 1956)
“Scheduled Bank” means a bank for the time being included in the list of banks
maintained under sub-section (1) of Section 37
(1) The Bank shall maintain at all its offices and branches an up-to date list of banks
declared by it to be scheduled banks under clause (a) of subsection (2).
(2) The Bank shall, by notification, in the official Gazette— (a) Declare any bank to
be scheduled bank which is carrying on the business of banking in Pakistan and
which— i. Is a banking company as defined in section 227F of the Companies Act,
1913, or a co-operative bank, or a corporation or a company incorporated by or
established under any law in force in any place in or outside Pakistan;
ii. Has a paid-up capital and reserves of an aggregate value of not less than five lakhs
of rupees:
Provided that in the case of a co-operative bank, an exception may be made by the

2
 Bank;

iii. Satisfies the Bank that its affairs are not being conducted in a manner
detrimental to the interest of its depositors; Direct the de-scheduling of any scheduled
bank which ceases to fulfill the requirements mentioned in clause (a) or goes into
liquidation or otherwise wholly or partly ceases to carry on banking business;
Provided that the Bank may, on application of the scheduled bank concerned and
subject to such conditions, if any, as it may impose, defer the making of a direction
under clause (b) for such period as the Bank considers reasonable to give the
scheduled bank an opportunity of fulfilling the requirements mentioned in sub-
clauses (ii) and (iii) of clause (a); Alter the description in the list of scheduled banks
whenever any scheduled bank changes its name.
Explanation: - In sub-Section (2) the expression “value” means the real or
exchangeable and not the nominal value of the capital and reserves and the valuation
made by the Bank shall be final
9. “Prospectus means any document described or issued as prospectus, and includes
any notice, circular, advertisement, or other communication, inviting offers from the
public for the subscription or purchase of any shares in, or debentures of, a body
corporate, or inviting deposits from the public, other than deposit invited by a
banking company or a financial institution approved by the Federal Government,
whether described as prospectus or otherwise.”
QUESTION.2.
A company may be wound up by the court when :
◦ It has passed a special resolution to be wound up by the court
◦ Default is made in delivering the statutory report are in holding the statutory
meeting or any two consecutives AGM
◦ It does not commence its business with in a year from its incorporation or suspend
its business for a whole year
◦ The number of its member falls below 7 or 2 in case of private company
◦ Unable to pay its debts ◦ Carrying out unlawful or fraudulent activities
◦ Carrying on business not authorized by the memorandum ◦ Conducting its business
in a manner oppressive to its members
◦ Managed by person who fail to maintain proper accounts or commit fraud,
misfeasance or malfeasance in relation to the company
◦ Managed by persons who refuse to act according to the companies ordinance,
memorandum, or articles or fail to carry out the directions of the court or registrar or
the corporate law authority
◦ Seizes to be a listed company if it is such a company

3
 ◦ The court is of opinion that it is just an equitable that it should be wound up
Section 297-305
Provisions applicable to creditors' voluntary winding up. -
The provisions contained in sections 373 to 382, both inclusive, shall
apply in relation to creditors' voluntary winding up.
373.Meeting of creditors.
(1) The company shall cause a meeting of the creditors of the company to be
summoned for the day, or the day next following the day, on which there is to be held
the general meeting of the company at which the resolution for voluntary winding up
is to be proposed, and shall cause the notices of the said meeting of creditors to be
sent by post to the creditors simultaneously with the sending of the notices of the
general meeting of the company.
(2) The company shall cause notice of the meeting of the creditors to be advertised in
the manner specified in sub-section (1) of section 361 for the publication of a notice
under that sub-section.

(3) The directors and chief executive of the company shall-

(a) cause a full statement of the position of the company's affairs and assets and
liabilities together with a list of the creditors of the company and the estimated
amount of their claims to be laid before the meeting of creditors to be held as
aforesaid; and
(b) appoint one of their numbers to preside at the said meeting.
(4) It shall be the duty of the director appointed to preside at the meeting of creditors
to attend the meeting and preside thereat.
(5) If the meeting of the company at which the resolution for voluntary winding up is
to be proposed is adjourned and the resolution is passed at an adjourned meeting, any
resolution passed at the meeting of the creditors, held in pursuance of subsection (1)
of this section, shall have effect as if it had been passed immediately after the passing
of the resolution for winding up the company.
(6) If default is made-
(a) by the company in complying with sub-section (1) and (2);
(b) by the directors and chief executive of the company in complying with sub-
section(3);
(c) by any director of the company in complying with sub-section(4);
the company, each of the directors or the director or the chief executive, as the case
may be, shall be punishable with fine which may extend to five thousand rupees and,
in the case of a continuing default, to a further fine which may extend to one hundred
rupees for every day after the first during which the default continues and, in the

4
case of default by the company, every officer of the company who is in default shall
be liable to the like punishment. company, every officer
(5) If the meeting of the company at which the resolution for voluntary winding up is
to be proposed is adjourned and the resolution is passed at an adjourned meeting, any
resolution passed at the meeting of the creditors, held in pursuance of subsection (1)
of this section, shall have effect as if it had been passed immediately after the passing
of the resolution for winding up the company.
(6) If default is made-
(a) by the company in complying with sub-section (1) and (2);
(b) by the directors and chief executive of the company in complying with sub-
section(3);
(c) by any director of the company in complying with sub-section(4);
the company, each of the directors or the director or the chief executive, as the case
may be, shall be punishable with fine which may extend to five thousand rupees and,
in the case of a continuing default, to a further fine which may extend to one hundred
rupees for every day after the first during which the default continues and, in the
case of default by the company, every officer of the company who is in default shall
be liable to the like punishment. company, every officer .
382. Final meeting and dissolution. -
(1) As soon as the affairs of the company are fully wound up, the liquidator shall
(a) make up a report and account of the winding up, showing how the winding up has
been conducted and the property of the company has been disposed of and such other
particulars as may be prescribed; and
(b) call a general meeting of the company and a meeting of the creditors for the
purpose of laying the report and account before the meetings and giving any
explanation thereof.
(2) The account referred to in clause (a) of sub-section (1) shall be audited and a copy
thereof together with a copy of the auditor's report and notice of the meeting shall be
sent by post to each contributory and creditor of the company at least ten days before
the meetings, required to be held under this section.
(3) The notice of the meeting referred to in this section specifying the time, place and
object thereof shall also by published at least ten days before the meeting in the
manner specified in sub-section (1) of section 361 for the publication of a notice
under that sub-section.
(4) Within one week after the date of the meetings, or if the meetings, are not held on
the same date, after the date of the later meeting, the liquidator shall send to the
registrar a copy of his report and account, and shall make a return to him of the
holding of the meetings along with the minutes of the meetings in the prescribed
manner.

5
 (5) If a quorum (which for the purpose of this section shall be two persons) is not
present at either of such meetings, the liquidator shall, in lieu of the return referred to
in sub-section (4), make return that the meetings were duly summoned and that no
quorum was present thereat and, upon such a return being made within one week
after the date fixed for the meetings alongwith a copy of his report and account in the
prescribed manner, the provisions of sub-section (4) as to making of the return shall,
in respect of that meeting, be deemed to have been complied with.
(6) On receiving the report and account and also, in respect of each such meeting
either the return mentioned in sub-section (4) or the return mentioned in subsection
(5), the registrar shall after such scrutiny as he may deem fit, register them, and on
the expiration of three months from the registration thereof the company shall be
deemed to be dissolved:
Provided that, if on his scrutiny the registrar considers that the affairs of the company
or the liquidation proceedings have been conducted in a manner prejudicial to its
interest or the interests of its creditors or members or that any actionable irregularity
has been committed, he may take action in accordance with the provisions of this
Ordinance: Provided further that the Court may, on the application of the liquidator
or any other person who appears to the Court to be interested, make an order
deferring the date at which the dissolution of the company is to take effect for such
time as the Court thinks fit.
(7) It shall be the duty of the person on whose application an order is made by the
Court under the foregoing proviso, within fourteen days after the making of the order,
to deliver to the registrar a certified copy of the order for registration and, if that
person fails so to do, he shall be liable to a fine which may extend to one hundred
rupees for every day during which the default continues.
(8) If the liquidator fails to comply with any requirements of this section, he shall be
publishable with fine which may extend to five thousand rupees and, in the case of a
continuing failure, to a further fine which may extend to one hundred rupees for
every day after the first during which the failure continues.
QUESTION 3.(3)
91. Only fully paid shares to be issued
92. Power of company limited by shares to alter its share capital
93. Notice to register of consolidation of share capital, etc.
94. Notice of increase of share capital or of members
95. Prohibition of purchase or grant of financial assistance by a company for
purchase of its own or its holding company’s shares
95A Power of company to purchase its own shares
91. Only fully paid shares to be issued.- No company shall issue partly paid shares:
Provided that where a company has partly paid shares on the commencement of this
Ordinance, it--

6
 (i) shall not issue any further share capital until all the shares previously issued has
become fully paid up; and

(ii) shall pay dividend only in proportion to the amount paid up on each share.

92. Power of company limited by shares to alter its share capital.- (1) A company
limited by shares, if so authorised by its articles, may alter the conditions of its
memorandum so as to--

(a) increase its share capital by such amount as it thinks expedient;

(b) consolidate and divide the whole or any part of its share capital into shares of
larger amount than its existing shares;

(c) sub-divide its shares, or any of them, into shares of smaller amount than is fixed
by the memorandum; or

(d) cancel shares which, at the date of the passing of the resolution in that behalf,
have not been taken or agreed to be taken by any person, and diminish the amount of
its share capital by the amount of the share so cancelled:

Provided that, in the event of consolidation or sub-division of shares, the rights

attaching to the new shares shall be strictly proportional to the rights attaching to the
previous shares so consolidated or sub-divided:

Provided further that, where any shares issued are of a class which is the same as that
of shares previously issued, the rights attaching to the new shares shall be the same as
those attaching to the shares previously held.

(2) The new shares issued by a company shall rank pari passu with the existing
shares of the class to which the new shares belong in all matters, including the right
to such bonus or right issue and dividend as may be declared by the company
subsequent to the date of issue of such new shares.
(3) The powers conferred by sub-section (1) shall be exercisable by the company

7
 only in a general meeting.

1 [(3A) Notwithstanding anything contained in this Ordinance or any other law for
the time being in force or the memorandum and articles, where the authorised capital
of a company is fully subscribed, or the un-subscribed capital is insufficient, the same
shall be deemed to have been increased to the extent necessary for issue of shares to a
scheduled bank or financial institution in pursuance of any obligation of the company
to issue shares to such scheduled bank or financial institution.]

(4) A cancellation of shares in pursuance of sub-section (1) shall not be deemed to be

a reduction of share capital within the meaning of this Ordinance.
(5) The company shall file with the registrar notice of the exercise of any power
referred to in sub-section (1) within fifteen days from the exercise thereof.
93. Notice to registrar of consolidation of share capital, etc..- (1) Where a company
having a share capital has consolidated and divided its share capital into shares of
larger amount than its existing shares, it shall, within fifteen days of the consolidation
and division, file notice with the registrar of the same, specifying the shares
consolidated and divided.
(2) If a company makes default in complying with the requirements of subsection (5)
of section 92 or sub-section (1) of this section, it shall be liable to a fine which may
extend to one hundred rupees for every day during which the default continues, and
every officer of the company who knowingly and willfully authorises or permits the
default shall be liable to the like penalty.
94. Notice of increase of share capital or of members.- (1) Where a company having
a share capital has resolved to increase its share capital beyond the authorised capital
2[or such capital is increased under sub-section (3-A) of section 92] and where a
company not having a share capital has resolved to increase the number of its
members beyond the number previously registered, it shall file with the registrar,
within fifteen days after the passing of the resolution, a notice of the increase of
capital or members, as the case may be, and the registrar shall record the increase:
1[Provided that where default is made by a company in filing a notice of increase
in the authorised capital under sub-section (3-A) of section 92, the scheduled
bank or the financial institution to whom shares have been issued may file notice
of such increase with the registrar and such notice shall be deemed to have been
filed by the company itself and the scheduled bank or financial institution shall
be entitled to recover from the company the amount of any fee properly paid by it
to the registrar in respect of such increase.]

(2) The notice to be given under sub-section (1) shall include particulars of the
shares to be affected and the conditions, if any, subject to which the new shares
are to be issued.

8
 (3) If a company makes default in complying with the requirements of
subsection (1), it shall be liable to a fine which may extend to one hundred rupees
for every day during which the default continues, and every officer of the
company who knowingly and willfully authorises or permits the default shall be
liable to the like penalty.
(4) No resolution referred to in sub-section (1) shall take effect unless the notice
required by that sub-section to be filed with the registrar is duly sent to him.
95. Prohibition of purchase or grant of financial assistance by a company for
purchase of its own or its holding company’s shares.- (1) No company shall have
power to buy its own shares or the shares of its holding company.
(2) No company limited by shares, other than a private company, not being a
subsidiary of a public company, shall give, whether directly or indirectly and
whether by means of a loan, guarantee, the provision of security or otherwise,
any financial assistance for the purpose of or in connection with purchase made
or to be made by any person of any shares in the company or, where the company
is a subsidiary, in its holding company:
Provided that nothing in this sub-section shall prevent the company from
advancing or securing an advance to any of its salaried employees, including a
chief executive who, before his appointment as such, was not a director of the
company, but excluding all directors of the company, for purchase of shares of
the company or of its subsidiary or holding company, if making or securing of
such advance is a part of the contract of service of such employee.
(3) If a company acts in contravention of sub-section (1) or sub-section (2), the
company and every officer of the company who is knowingly and willfully in default
shall be liable to a fine which may extend to ten thousand rupees if the default relates
to a listed company and to two thousand rupees if the default relates to any other
company.

1[(4) Nothing in this section shall prevent --

(a) a company from redeeming any shares or any other redeemable security issued in
accordance with the provisions of this Ordinance; and

(b) a listed company from purchasing its own shares in accordance with the
provisions of this Ordinance.]

2[95A. Power of company to purchase its own shares. (1) Notwithstanding anything
contained in this Ordinance or any other law for the time being in force or the

9
 memorandum and articles, a listed company may, subject to the provisions of this
section and the rules framed by the Commission in this behalf, purchase its own
shares (hereinafter in this section referred to as “purchase”).

(2) The purchase shall be authorised by a special resolution which shall indicate
maximum number of shares to be purchased, the maximum price at which the shares
may be purchased; and the period within which the purchase is to be made.

(3) The notice of the meeting in which the special resolution authorising the purchase
of shares is proposed to be moved, shall be accompanied by an explanatory statement
containing all material facts including the following:-

(a) justification for the purchase;

(b) source of funding;

(c) effect on the financial position of the company; and

(d) nature and extent of the interest, if any, of every director, whether directly or
indirectly. (4) The purchase shall always be in cash and shall be out of the
distributable
profits.
(5) Where shares are purchased by a company on premium, the account of premium
shall be charged to Share Premium Account of the company or in the absence of any
balance therein, to the distributable profits of the company.

(6) Where purchase is made at a price lower than the nominal value of shares, the
difference shall be credited to the reserve created under sub-section (10).

(7) The company shall have such debt equity and current ratios as may be prescribed.

(8) The majority of the directors including the chief executive, shall at a meeting
make a declaration of solvency verified by an affidavit to the effect that they have
made a full inquiry into the affairs of the company, and that after having done so,
they have formed the opinion that the company shall continue to operate as a going

10
concern and that it is capable of meeting its liabilities on time during the period upto
the end of the immediately succeeding financial year.

(9) The purchase shall be made through a tender system and the mode of tender shall
be decided by the company in general meeting through a special resolution.

(10) The shares purchased under this section shall not be resold and shall be
cancelled forthwith. The amount of the company’s paid up share capital shall be
diminished by the nominal value of such shares accordingly. The amount by which
the company’s paid up share capital is thereby diminished on cancellation of the
shares purchased shall, after accounting for the credit, if any, pursuant to sub-section
(6) of this section, be transferred from the distributable profits to an account to be
called “Capital Re-purchase Reserve Account”.

(11) The provisions of this Ordinance relating to the reduction of a company’s share
capital apply as if the Capital Re-purchase Reserve Account were paid-up share
capital of the company, except that the reserve account may be applied by the
company is paying up its un-issued shares to be allotted to members of the company
as fully paid bonus shares.

(12) Where a company has purchased its own shares under this section, it shall
maintain a register of shares so purchased and enter therein the following particulars,
namely:-
(i) number of shares purchased;

(ii) consideration paid for the shares purchased;

(iii) mode of purchase; and

(iv) the date of cancellation of such shares.

(13) A return about the purchase of shares under this section containing such
particulars relating to purchase as may be prescribed, along with the declaration of
solvency made under sub-section (8) shall be filed with the Commission and the
registrar within thirty days of the purchase.

11
 (14) If a company makes default in compliance with the provisions of this section,
the company shall be liable to a fine which may extend to one million rupees and any
officer of the company who is knowingly and wilfully in default shall also be
punishable with imprisonment for a term which may extend to six months, or with
fine which may extend to one million rupees, or with both.

12
13