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CORPORATE & BUSINESS LAW

Formation of Al-Khair Suger Mills (Public) Company
According to James Stephen; A company is an association of many persons who contribute money or money s worth to a common stock and employees it in some trade or business and who share a profit and loss arising there from

Formation of Al-Khair Suger Mills (Public) The formation of company is possible under four stages that are under as; y y y y Promotion Incorporation Subscription Commencement of business 

Promotion
The promoters do the basic work f or starting a business weather it is industrial or commercial basis. The promoters prepare certain documents and comply with the rules stated in the company ordinance 1984.The document are filed with the province s registrar.

Name of Promoters: (1) Mr.Salman Shahid (2) Mr.Amir Shahzad (3) Mr.Arslan (4) Mr.Atif Iftikhar
y Business planning;
Promoters discover the ideas and hopes that there are possibilities of a business. The idea may relate to new or an existing business. The idea is based upon experience or observation of expert in field of business.

y

Analyses of plan;
The promoter can prepare estimate about the cost of land, building and machinery, labour, raw materials and financial basis. The success of business depends upon careful analyses.

y

Seek opinion;
The view of the consultants must be given due importance while preparing the final draft. The success of business is linked with the exact calculations of the business programme.

y

Collecting resources;
The promoters can assemble business resources and factors of production. The promoters make some contracts with the suppliers of raw materials and machinery.

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CORPORATE & BUSINESS LAW

y

Filing papers;
The papers to be filed are;(1) Memorandum of association(2) Article of association (3) Statutory declaration that legal requirements have been compiled with 4 original copies of treasury challan. 

Incorporation stage
y The second step for establishment of Al-Khair Suger mills is to get registration. Name; The name of the company is proposed by promoters. The name should be different from other existing companies like Al-Khair Suger mills. The name must be suggesting the patronage of any head of state. Documents;
The documents to be filled are,(1)Listed directors with their consent within 7 days of issue of certificate of incorporation,(2)Notice of situation of company register office and (3)Prospectus on or before the date of its publication.

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Fee charges; The public company shall pay amount of duty on share capital and the prescribe fee of filling documents. The amounts are paid in a government treasury. Certificate; The registrar issues a certificate of registration; it is also called a certificate of incorporation. Al-Khair Suger mills becomes a legal person from the date of registration that is 1st March 1984. Address; After the incorporation the management must inform the registrar in writing about registered office of company within 28 days. 

Subscription stage
A private company can commence business on receipt of certificate of incorporation however a public company has to fulfill another requirement of subscription to obtain the certificate of commencement of business. The subscription stage is connected to following steps. y y y A prospectus has been issued inviting the public to subscribe for the shares. A copy of prospectus is submitted to the registrar. Where no prospectus has been issued, a statement in lieu of prospectus has been filed with the registrar. The promoters can make agreement to sell share and debenture before of invitation to general public. The under writer provides guarantee that their share will be sold within time period.

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CORPORATE & BUSINESS LAW 

Commencement stage
The commencement stage contains the following points; y

Shares;
The shares payable in cash have been allotted. The amount has been raised by issue of shares for, 1. Purchase of property 2. Preliminary expenses 3. Money borrowing 4. Working capital 5. Other expenditure Directors; The directors must purchase the shares. Every director is bound to buy at least one share and who failed to buy share cannot become director. Declaration; A declaration is given that all conditions have been completed. It may be minimum subscription has been collected, the director have paid share money is full and the amount of subscription cannot be refunded. Business certificate; The registrar must satisfy himself that all requirements for the start of business have been .then he can issue a certificate of commencement of business.

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Legal documents for formation of Al-Khair Suger mills
There are three legal documents for formation of Public limited company that are; y Memorandum of Association(MOA) y Article of Association(AOA) y Prospectus Now we discuss every document with details and every requirement has its own legal existence.

(1) Memorandum of Association
Definition (sec.15) The memorandum of Association is a document which regulates a company s external activities and constitution and which must be drawn up at the formation of a company The charter of every company is Memorandum of association and it makes the relationship between company and general public. In other words we can say the memorandum of association regulates the external affairs of the company due to this the shareholders and creditors can know the range of business activities of the public limited company. The memorandum of association has 6 clauses.
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CORPORATE & BUSINESS LAW

Clauses of Memorandum of Association;
y Name; The name of a company proposed in this clause. The name should be different from other existing companies. Situation; The place of the company where the company is situated. It also contains the place where the company s office is established. Objects; The purpose of the company is mention in this clause. It always for the public interest and does not against the public satisfaction.
Liability;

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In this clause the liabilities of members are to be written weather it is limited or not limited. Capital; The total capital of the company under which it is registered and all the matter related to sales, purchases, finance and others requirement is done. Association; In this clause we enclose that our company is private or public .

(2)

Article of Association

Definition (sec.26) The articles of association are documents that govern the running a company. Its sets out voting rights meetings, power of the management to the article of association are
the bye-laws of a company

These are the rules to manage the internal affairs of the company and to achieve objects stated in memorandum .The articles are sub-ordinate to the memorandum of association. The articles cannot go beyond the scope of the companies ordinance 1984.The articles regulates the rights of shareholders of a company. Every company is allowed to manage its own articles under which the company runs over business.

Contents of Article of Association;
Now we discuss the contents of Articles of Association these are given below, y y y y y y y Rights of various classes of share holder. Alteration of share capital. General meeting of a company. Share capital in its division into different classes. Transfer of share from seller to buyer. Voting power of members. Appointment of directors.

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CORPORATE & BUSINESS LAW

y y y y y y y y y y

Power and duties of director. Disqualification of a director. Proceeding of the directors meeting. Filling of vacancies. Dividend and reserve. Winding up a company. Dividends and reserves. Accounts and their audit. Notices to be issues by a company. Indemnity to be paid to company officer or agent.

(3)
Definition

Prospectus

Prospectus is a document in visiting the public to buy a new share, stock or debenture in a public company stating the terms and giving certain information by law

A prospectus is a notice to general about the formation of a new company. A company tries to attract the people that there is best opportunity for investment in the shares and debentures. The prospectus includes terms and conditions for the purchase of shares and debentures. There is an application form in every copy of prospectus. The investor can apply on this form for purchase of shares or debentures.

Contents of Prospectus;
y y y y y y y y y Memorandum Description of business Directors remuneration Names of management Application money Payment to Promoters Auditors Report Interest in Capital Interest In Subsidiaries 

Statement in Lieu of prospectus:
A company having a share capital which does not issue a prospectus on or with reference to its formation, there has been delivered to the registrar for registration a statement in lieu of prospectus signed by every person who is names therein as a director or proposed director of the company or by his agent authorized in writing in the prescribed form.

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