Lecture No.

03 1|Page

Class: M.COM-2
Course Title: Corporate Law
Course Instructor: Zahid Hussain
Topics: (1) Objective of Companies Act, 2017
(2) Important Definitions
(3) Jurisdiction of Court
(4) Powers and Functions of Securities & Exchange
Commission of Pakistan
Relevant Provisions: Sections 2, 5 & 7 of Companies Act, 2017

References: Students are advised to visit the following links:

1. www.pakistancode.gov.pk
2. www.secp.gov.pk
3. https://www.secp.gov.pk/laws/acts/

THE COMPANIES ACT, 2017

ACT NO. XIX OF 2017
AN ACT to reform and re-enact the law relating to companies and for matters
connected therewith

WHEREAS 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:

o shareholders,

o creditors,

o other stakeholders and general public,

Prepared by: Zahid Hussain, Advocate (LL.M) Updated on: September, 2020
Lecture No.03 2|Page

 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;

IMPORTANT DEFINITIONS

Section 2 (9) ― “Body Corporate” or "Corporation" includes—

(a) a company incorporated under this Act or company law; or

(b) a company incorporated outside Pakistan, or

(c) a statutory body declared as body corporate in the relevant statute, but
does not include—

(i) a co-operative society registered under any law relating to

cooperative societies; or

(ii) any other entity, not being a company as defined in this Act or
any other law for the time being in force, which the concerned
Minister-in-Charge of the Federal Government may, by
notification, specify in this behalf;

Section 2 (17) ― “Company” means a company formed and registered under this
Act or the company law;

Section 2 (19) ― “Company Limited by Guarantee” means a company having the

liability of its members limited by the memorandum to such amount as the members
may respectively thereby undertake to contribute to the assets of the company in
the event of its being wound up;

Section 2 (20) ― “Company Limited by Shares” means a company; having the

liability of its members limited by the memorandum to the extent of amount, if any,
remaining unpaid on the shares respectively held by them;

Section 2 (35) ― “Foreign Company” means any company or body corporate

incorporated outside Pakistan, which—

(a) has a place of business or liaison office in Pakistan whether by itself

or through an agent, physically or through electronic mode; or

Prepared by: Zahid Hussain, Advocate (LL.M) Updated on: September, 2020
Lecture No.03 3|Page

(b) conducts any business activity in Pakistan in any other manner as

may be specified;

Section 2 (37) ― “Holding Company”, means a company which is another

company‘s holding company if, but only if that other company is its subsidiary;

Section 2 (38) ― “Listed Company” means a public company, body corporate or

any other entity whose securities are listed on securities exchange;

Section (49) ― “Private Company” means a company which, by its articles-

(a) restricts the right to transfer its shares;

(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 debentures or redeemable capital of the company:

Provided that, where two or more persons hold one or more shares in a
company jointly, they shall, for the purposes of this definition, be treated as a
single member;

Section 2 (52) ― “Public Company” means a company which is not a private

company;

Section 2 (54) ― “Public Sector Company” means a company, whether public or

private, which is directly or indirectly controlled, beneficially owned or not less than
fifty-one percent of the voting securities or voting power of which are held by the
Government or any agency of the Government or a statutory body, or in respect of
which the Government or any agency of the Government or a statutory body, has
otherwise power to elect, nominate or appoint majority of its directors and includes a
public sector association not for profit, licenced under section 42:

Provided that nomination of directors by the Commission on the board of the securities
exchange or any other entity or operation of any other law shall not make it a public
sector company;

Section 2 (64) “Shariah Compliant Company” means a company which is

conducting its business according to the principles of Shariah;

Prepared by: Zahid Hussain, Advocate (LL.M) Updated on: September, 2020
Lecture No.03 4|Page

Section 2 (65) ― “Single Member Company” means a company which has only
one member;

Section 2 (71) ― “Unlimited Company” means a company not having any limit on
the liability of its members;

PART II

JURISDICTION OF COURT

Section 5. Jurisdiction of the Court and creation of Benches.—

(1) The Court having jurisdiction under this Act shall be the High Court having
jurisdiction in the place at which the registered office of the company is
situate.

(2) Notwithstanding anything contained in any other law no civil court as provided
in the Code of Civil Procedure, 1908 (Act V of 1908) or any other court shall
have jurisdiction to entertain any suit or proceeding in respect of any
matter which the Court is empowered to determine by or under this Act.

(3) For the purposes of jurisdiction to wind up companies, the expression

“registered office” means the place which has longest been the registered
office of the company during the six months immediately preceding the
presentation of the petition for winding up.

(4) There shall be, in each High Court, one or more Benches on permanent
basis, each to be known as the Company Bench, to be constituted by the
Chief Justice of the High Court to exercise the jurisdiction vested in the High
Court under this Act:

(5) There shall be a Registrar to be known as “Registrar of the Company Bench”

duly notified by the Chief Justice of the respective High Court who shall be
assisted by such other officers as may be assigned by the Chief Justice of the
respective High Court.

(6) The Registrar of the Company Bench shall perform all the functions assigned
to it under this Act including all ministerial and administrative business of
the Company Bench such as the:

Prepared by: Zahid Hussain, Advocate (LL.M) Updated on: September, 2020
Lecture No.03 5|Page

 receipt of

o petitions

o applications

o written replies

 issuance of notices

 service of summons and

 such other functions or duties as may be prescribed under section 423.

(7) The Chief Justice of the respective High Court, if deemed appropriate, may
also establish a secretariat in each Company Bench of the respective High
Court in such form and manner to provide secretarial support and to perform
such functions as may be prescribed under section 423.

PART III

POWERS AND FUNCTIONS OF THE SECURITIES AND EXCHANGE

COMMISSION OF PAKISTAN

Section 7. Powers and functions of the Commission.—

(1) The Commission shall exercise such powers and perform such functions as
are conferred on it by or under this Act.

(2) The powers and functions of the Commission under this Act shall be in addition
to and not in derogation to the powers and functions of the Commission under
the Securities and Exchange Commission of Pakistan Act, 1997 (XLII of
1997).

Prepared by: Zahid Hussain, Advocate (LL.M) Updated on: September, 2020