Ch#2 Incorporation of Companies Ltvors - nearpeerorg Ch # 2 - Steps of Incorporation Steps of Incorporation Q Getting availability of suitable name from registrar Preparing Memorandum of Association (MOA) O Preparing Articles of Association (AOA) Filing documents with registrar Obtaining the “certificate of incorporation” of company 4 mp Leavons nearpeer.orgCh # 2 - Steps of Incorporation Steps of Incorporation O Getting availability of suitable name from registrar Oreparing Memorandum of Association (MOA) Preparing Articles of Association (AOA) O Filing documents with registrar D Obtaining the “certiticate of incorporation” ot company nearpeerorg Ch #2 —- Names Restrictions on Names (Sec 10) Prohibited Names + Name which contains such word or expression, as may be notified by the SECP + Identical with name of a company already registered + Nearly resembling that name of a company already registered + Inappropriate, undesirable or deceptive + Designed to exploit or offend religious sentiments of people. + Any other grounds as may be specified Names which require prior approval of SECP If proposed name suggest + Patronage of any, past/present, Pakistani/foreign, Head of State Any connection with Federal Govt. or Provincial Govt. or any department or authority of any such Government; Any connection with any corporation set up by or under any Federal or Provincial law; Patronage of, or any connection with, any foreign Government or any international organization. Establishing a modaraba management company or to float a modaraba; or ‘Any other business requiring licence fram the SECP. mp Ledwore nearpeer.orgCh #2 - Names Restrictions on Names (Sec 10) Application for reservation of a name Application to the registrar for reservation of any name for a period up to 60 days. Q Ifthe application is refused, aggrieved person may within 30 days of the order of refusal prefer an appeal to SECP. ifitis found that a name was reserved by furnishing false or incorrect information, such reservation shall be cancelled -If company has been incorporated, it shall be directed to change its name. -Person making application shall be liable to a penalty not exceeding level 1 Q Order of SECP shall be final and shall not be called in question before any court or authority Ltvors - nearpeerorg Ch #2 —- Names Publication of Name (Sec 22 to 24) 2 Display in a conspicuous position outside every office or place of business, name & incorporation number, in letters easily legible and in English or Urdu characters. Q Display a certified copy of certificate of incorporation at every place of business. Q Mention its name in legible English or Urdu characters, in all bills of exchange, promissory notes, endorsements, cheaues and orders for money or goods purporting to be signed by or on behalf of company and in all bills of parcels, invoices, receipts and letters of credits. O Get its name, address of registered office, telephone, fax number, e-mail and website addresses, if any, printed on letter-head and all documents, notices and official publications 2 Shall have its name engraved in legible fcrm on its common seal pS —P nearpeer.orgCh # 2 — Steps of Incorporation Steps of Incorporation Q Getting availability of suitable name from registrar Q Preparing Memorandum of Association (MOA) Preparing Articles of Association (AOA) O Filing documents with registrar D Obtaining the “certiticate of incorporation” ot company nearpeerorg Ch#2-MOA Clauses of MOA (Sec 27, 28, 29) 1) Name Clause Name of Co with last word Public Co: imited" Private Co: "(Private) Limited” Single Member Company “(SIMc-Private) Limited” Guarantee Ltd (Guarantee) Limited" Unlimited “Unlimited” 2) Registered Office Clause Province or part of Pakistan not forming pert of a province (in which registered office is to be situated) Requirements for Registered Office Co shall have a registered office within 30 days of incorporation Notify to registrar in specified manner Notice of change be communicated to registrar within 15 days of change Change of address, from a city of any province to the other city or a city to another in any part of Pakistan not forming part of a Province, shall require special resolution £ ZeAvores nearpeer.orgCh#2-MOA Clauses of MOA (Sec 27, 28, 29) 3) Object Clause Principal line of business shall be mentioned 4) Undertaking Clause ‘An undertaking as may be specified (please see Specimen MOA — 1% Schedule) 5) Liability Clause Company Limited by Shares “Liability of the Members Is limited” Company Limited by Guarantee “thot each member undertakes to contribute to the assets of the company in the event of its being wound up while he is a member or within one year afterwards, for payment of the debts and liabilities of the company contracted before he ceases to be a member, and of the casts, charges and expenses of winding up, and for adjustment of the rights of the contributories among themselves such amount as ‘may be required, not exceeding a specified omourt; Unlimited Company sb of the Meer sunt” rp ZeAnores nearpeerorg Ch#2-MOA Clauses of MOA (Sec 27, 28, 29) 6) Share Capital Clause = Amount of share capital with which Co proposes to be registered (Authorised) - Number of Shares Face Value per Share For companies limited by guarantee and unlimited companies, this clause shall be included only if the company has a share capital “See Format of MOA (Page # 20-21) pS —P nearpeer.orgCh # 2 — Steps of Incorporation Steps of Incorporation Q Getting availability of suitable name from registrar Q Preparing Memorandum of Association (MOA) O Prepar Filing documents with registrar D Obtaining the “certiticate of incorporation” ot company O Filing documents necessary for “certificate of commencement” (Only for Public Co and Guarantee Ltd having Share Capital) nearpeerorg Ch#2-AOA Articles (Sec 36) It is option for company limited by shares to - Get the articles registered: or - Adopt Table A (1st schedule of Companies Act 2017) For @ company limited by guarantee and an unlimited company; Registration of AOA is compulsory requirements. For Guarantee Ltd or Unlimited Co; AOA shall state: If have share capital > ‘Amount of share capital at time of registration If not having share capital => Number of members at time of registration pS —P nearpeer.orgCh # 2 — Steps of Incorporation Steps of Incorporation Q Getting availability of suitable name from registrar O Preparing Memorandum of Association (MOA) O Preparing Articles of Association (AOA) Q Filing documents with registrar Obtaining the “certiticate of incorporation” ot company O Filing documents necessary for “certificate of commencement” (Only for Public Co and Guarantee Ltd having Share Capital) nearpeerorg Ch # 2 — Registration of Company Registration of MOA/AOA (Sec 16, 17) MOA & AOA + Declaration of compliance with requirements of Ordinance filed (by prescribed person/proposed director/otner officer) with registrar Registrar if satisfied may register the MOA & AOA. If registrar refused to register; If applicant fails to remove the deficiencies, registrar may refuse registration of company If registration is refused, subscribers may, within 30 days of refusal, prefer appeal to SECP. Order of SECP shall be final and shall not be called in question before any court/authority If registrar is satisfied that all requirements of thie Act, rules or regulations have been complied with, he shall register the MOA and other documents delivered to him. pS —P nearpeer.orgCh # 2 — Steps of Incorporation Steps of Incorporation Q Getting availability of suitable name from registrar O Preparing Memorandum of Association (MOA) O Preparing Articles of Association (AOA) O Filing documents with registrar Q Obtaining “certificate of incorporation” of company O Filing documents necessary for “certificate of commencement” (Only for Public Co and Guarantee Ltd having Share Capital) nearpeerorg Ch # 2 — Registration of Company Effects of Registration O Registrar shall issue a certificate that the company is incorporated. Q The certificate of incorporation shall state = Name and registration number of the company; = Date ofits incorporation; = Whether it is a private or a public company; + Whether itis a limited (limited by shares or guarantee) or unlimited; “Certificate of incorporation” shall be conclusive evidence that all requirements of this Ordinance in respect of registration ete have been complied with From date of incorporation. subscribers of MOA + subsequent members shall be a body corporate by the name contained in MOA *Upon registration, MOA and AO shall bind the company and the members (just like that they all have signed it) pS —P nearpeer.orgCh # 2 — Change in MOA - Name Clause Rectification of name of a company (Sec 11) Q If wrong name selected by company inadvertently or the name was obtained by furnishing false information: = Itmay change name with the app-oval of registrar; and = Itshall change name within 30 deys if registrar directs so. Q Opportunity to make representation against proposed direction Q ifthe company fails to report compliance with above direction within specified period, the registrar may = Enter on the register a new name for the company selected by him; and = Issue a certificate of incorporation on change of name (just like section 13) Ltvors - nearpeerorg Ch # 2 — Change in Name Clause Change of name (Sec 12) + Special Resolution + Approval of registrar. Special Resolution ~ 2(66) A resolution which has been passed by a majority of not less than three-fourths of such members entitled to vote as are presen: in person or through postal ballot by proxy ata general meeting of which not less than 21 days notice specifying the intention to propose the resolution as a special resolution has been duly given. If all members entitled to attend and vote at any such meeting so agree, a resolution may be proposed and passed as a special resolution at a meeting of which less then 21 days notice has been given Ordinary resolution - 2(46) A resolution passed by a simple majority of such members of the company entitled to vote as are present in person or by proxy or exercise the option to vote through postal ballot, as, provided in the articles or as may be specified, at a general meeting pS —P nearpeer.orgCh # 2 - Change in Name Clause After Effects of Change (Sec 13) Q Registrar shall issue a new certificate of incorporation altered to meet circumstances Q Continue to mention former name along with its new name on the outside every business place and in all documents (for 90 days from date of issue of new certificate) Q Change of name shall not affect the rights & obligations of Co. O Legal proceeding may be continued against the Co in new name (Addition or deletion of word “(Private)” not deemed as a change of name) Ltvors - nearpeerorg Ch # 2 - Alteration of MOA - Object & Registered Office Reasons for alteration in Object clause or registered office clause Change the place of its registered office from.- = One province to another province or Islamabad Capital Territory and vice versa; or = One province or Islamabad Capital Territory to a part of Pakistan not forming part of a province and vice versa; or Change its principal line of business; or O Adopt any business activity or any change therein which is subject to licence. registration, permission or approval under any law. pS —P nearpeer.orgCh # 2 - Alteration of MOA - Object & Registered Office Process Q Pass a special resolution. O Apply to SECP for approval. (Approval not required where alteration related to change its principal business) O Acopy of duly certified order of SECP shell be forwarded to the company and to the registrar within 7 days from the date of the order. Q Copy of altered MOA shall be filed to registrar by company within 30 days of order O Registrar shall register it and issue a certificate which shall be conclusive evidence Q Onwards the altered MOA shall be considered as the MOA of the company: O where alteration involves a transfer of registered office from jurisdiction of one company registration office to another, physical record of company shall be transferred to the other registrar (where the registerad office has been shifted) O Where alteration involves change in principal line of business, company shall only file the amended MOA with registrar within 30 days to comply this section, aa i nearpeerorg Ch # 2 - Alteration of MOA - Object & Registered Office SECP Approval for alteration Q SECP may make an order confirming alteration on such terms and conditions as it thinks fit and make such order as to costs as it tainks proper. O SECP shall in exercising its discretion have regard to the rights and interests of = Members of company or of any class of them; and = Creditors SECP may, ifit thinks fit, give such directions and make such orders as it expedient for facilitating or carrying into effect any such arrangement. may think pS —P nearpeer.orgCh #2 - Alteration of AOA Alteration of articles (Sec 35, 38, 40) Company may, hy special resolution, alte its AOA Acopy of altered AOA shall be filed with registrar within 30 days of passing of resolution O Registrar shall register the same and thenceforth those AOA shall be the AOA of company. G Anyalteration shall be as valid as if originally contained in the AOA If alteration affects the substantive rights or liabilities of members or of a class of members, it shall be carried out only if a majority of at least 3/4" of those affected vote for that (personally or through proxy) | nearpeerorg Ch # 2 — Registration of Company — Minimum Members Carrying on business with less than min members (Sec 47) Private (Other than SMC) = 2 Others - - Carries on business > 6 months - Every member (knowing the fact) during that time shall be severally liable for payment of the whole debts of the Co contracted during that time pS —P nearpeer.orgCh # 2 - Conversion of Companies (46 to 50) Public to Private / Private to SMC / Unlimited to Limited / Limited by Guarantee to Limited by Shares (Provisions same for all these conversions) O Pass special resolution Amend its MOA and AOA to include conditions of the proposed status company O Comply with all the requirements as may 9e specified O Apply to SECP for approval 0 IFSECP is satisfied, such conversion shall be allowed by an order in writing. O Acopy of confirming order, duly certified ay authorised officer of SECP, shall be forwarded to the company and to registrar within 7 days from the date of the order, © A copy of altered MOA & AOA shall, within 15 days from the date of the order, be filed by the company with registrar O Thenceforth MOA and AOA so filed shall ke the MOA and AOA of newly converted company. Ltvors - nearpeerorg Ch # 2 - Conversion of Companies (46 to 50) Private to Public / SMC to Private / Limited to Unlimited / Li by Guarantee (Provisions same for all these conversions) ited by shares to Limited O Ifa company alters its AOA to exclude the conditions of existing status company: + as on the date of the alteration, cease to be the existing status company; and * file with registrar a copy of altered MOA and AOA along with special resolution. Oi Default would attract a penalty of level 2 pS —P nearpeer.orgCh # 2 - Conversion of Companies (46 to 50) Other conditions Reserve share capital on conversion from un ed to ited company O Unlimited company (having share capital) may, by its resolution for registration as a limited company, increase nominal amount of its share capital by increasing nominal amount of each share GI Such increased amount shall not be called up (except in winding up) Issue of certificate and effects of conversion O Registrar upon registration of altered MOA & AOA upon conversion shall issue @ certificate. Q The conversion of status of a company shall not affect: O Any debts, liabilities, obligations or contracts incurred before conversion; and O Any rights or obligations of the company and any legal proceedings. | nearpeerorg