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The decision to increase the capital of the company by the issue of further shares lies with the directors of such company. With
respect to further issue of shares, if existing members decline or do not subscribe to the offer of new shares, the directors have
the power to allot and issue such shares in such manner as they deem fit.
Directors (or an officer authorized by the directors) are to sign the circular which is to accompany any offer of new shares under
this section.
An extra ordinary general meeting may be called at any time by the directors for consideration of any matter requiring approval
of the company in a general meeting.
The chairman of the Board of Directors presides as chairman at every general meeting of the company. If there is no such
chairman, or if at any meeting he is not present within fifteen minutes after the time appointed for holding the meeting, or is
unwilling to act as chairman, any one of the directors present may be elected to be chairman.
The first directors have the right to hold office until the election of directors in the first annual general meeting.
Any casual vacancy in the Board of Directors of a company is filled up by the directors.
The directors in general meeting determine the remuneration of a director for performing extra services, including the holding of
the office of chairman.
The Directors of the company have the right to obtain loan from the company subject to fulfillment of certain requirements.
Section 196: Powers of Directors with regard to managing the business of the company
The business of a company is managed by the directors, who may pay all expenses incurred in promoting and registering the
company, and may exercise all such powers of the company as are not by this Ordinance, or by the articles, or by a special
resolution, required to be exercised by the company in general meeting.
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The directors of a company exercise the following powers on behalf of the company, and do so by means of a resolution passed
at their meeting, namely:
Section 198 and 200: Appointing CEO and determining Terms of his Appointment
The directors have the right to appoint an individual to be the Chief Executive of the company and determine the terms and
conditions of appointment of a Chief Executive, if required by the company’s articles.
The directors of a company by resolution passed by not less than three-fourths of the total number of directors may remove a
chief executive before the expiration of his term of office.
The directors can decide to maintain books of accounts at a place other than the registered office of the company.
The directors, during business hours, have the right to inspect the books of accounts and other books and papers of the company.
The directors shall from time to time determine whether and to what extent and at what time and places and under what
conditions or regulations the accounts and books or papers of the company or any of them shall be open to the inspection of
members.
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The dividend is always recommended by the Directors and declared by the company in general meeting.
The first auditors of a company are to be appointed by the directors within sixty days of the date of incorporation of the
company. The directors may fill in any causal vacancy in the office of auditors. Moreover, the directors fix the remuneration of
the auditors, where the auditors have been appointed by them.
Any director may apply to the Court for a declaration that any shares have been allotted for inadequate consideration.
Duties of a director:
Every company director has a personal responsibility to ensure that all the statutory documents are filed with the Registrar and
the Commission as and when required under the Ordinance. In particular:
1. Audited accounts (only for public limited companies including association not for profit); and private limited companies
having paid up capital of Rs. 7.5 million or above);
2. Annual returns (Form A/B);
3. Particulars of directors or other officers (Form 29); and
4. Notice of change of registered office (Form 21)
The directors of a company shall not refuse to transfer any shares or debentures that are fully paid unless the transfer deed is for
any reason defective or invalid.
With respect to the procedure for commencement of business, the Chief Executive or one of the directors and the secretary are to
file with the registrar a declaration that the conditions for commencement of business as are mentioned in this section have been
complied with.
With respect to the statutory meeting of company the directors have the following duties:
1. At least three directors, one of whom is to be the Chief Executive shall certify the statutory report.
2. The statutory report is to be forwarded to every member of the company at least twenty one days before the meeting.
3. At least five certified copies of the statutory report are also to be delivered to the registrar for registration.
4. At the commencement of the meeting and throughout its duration, a list caused to be prepared by the directors showing
the names, occupations, nationality and address of the members, and the number of shares held by them respectively is to
be produced.
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The retiring directors shall continue to perform their functions until their successors are elected. Moreover, the continuing
directors are required to take immediate step to hold the election of directors and in case of any impediment report the
circumstances of the case to the registrar within fifteen days of the expiry of the term laid down in section 180.
The directors of a company are required to fix the number of elected directors of the company not later than thirty-five days
before the convening of the general meeting at which directors are to be elected.
The directors are required to furnish to the company the particulars of their appointment or any change therein, as the case may
be.
The directors are responsible for compliance with the statutory requirements regarding preparation and maintenance of proper
books of account and circulation of financial statements that give a true and fair view.
With respect to inspection of books of accounts and books and papers of a company by the registrar or by any officer authorized
in this behalf by Commission, every director of the company is bound to:
1. Produce all such books of accounts and books and papers as are in his custody or under his control.
2. Furnish information, statements and explanations relating to the affairs of the company required by the abovementioned
persons; and
3. Provide reasonable assistance for such inspection
The directors of every company are required to lay before the company in annual general meeting audited balance sheet and
profit and loss account etc.
The directors are required to make out and attach to every balance sheet a report with respect to the state of the company’s affairs
and other information and such report is signed by the chairman of the directors or the chief executive of the company on behalf
of the directors if authorized in that behalf.
The directors shall approve, and the Chief Executive and at least one director shall sign, the balance sheet and profit and loss
account or income and expenditure account of the company.
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Every director is bound to furnish to the best of his power, such information, explanation or document as may be required by the
registrar.
In case of voluntary winding up its directors may make a declaration that after a full inquiry into the affairs of the company, they
are of the opinion that the company has no debts and it will be able to pay all its debts in full within such period not exceeding
twelve months from the commencement of winding up.
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