Company Law

Miss Rabia Asad

Fall 2019
Iqra University Islamabad
 Securities and Exchange Commission of Pakistan

• The Securities and Exchange Commission of Pakistan (SECP) is

the financial regulatory agency in Pakistan whose objective is to
develop a modern and efficient corporate sector and a capital
market based on sound authority principles, in order to encourage
investment and foster economic growth and prosperity in Pakistan.
 Divisions
• The SECP is divided into the following divisions:
• Company Law Division
• Securities Market Division
• Specialized Companies Division
• Insurance Division
• Prosecution and Legal Affairs Division
• Support Services Division
The SECP's head office is located in the NIC Building on Jinnah Avenue
in the Blue Area of Islamabad, Pakistan's federal capital.
Chairman of SECP
• The federal cabinet, on 9th August 2019, approved the appointment
of financial sector professional Aamir Khan as the chairman of the
Securities and Exchange Commission of Pakistan (SECP).
• The federal government has appointed Aamir Khan as chairman SECP
for a period of three years with immediate effect.
• Aamir Khan has 30 years of experience in banking, capital markets,
structuring of financial solutions/products, leading national initiatives,
business transformation, and regulatory reform. Since 2012, he has
been serving as an executive director at the SECP.
 Pakistan Stock Exchange
• The Pakistan Stock Exchange,abbreviated as PSX, is a stock
exchange in Pakistan with trading floors
in Karachi, Islamabad and Lahore. PSX was reclassified as
a MSCI Emerging Market in May 2017, while the FTSE classifies PSX as
a Secondary Emerging Market.
• The PSX was established on 11 January 2016 after the merger of
the Karachi, Lahore and Islamabad. PSX's origin's were laid with the
establishment of the Karachi Stock Exchange in 1947, the Lahore
Stock Exchange in 1970 and the Islamabad Stock Exchange in 1992. As
of February 23, 2018, there are 559 companies listed in PSX and the
total market capitalisation is $84 billion.
• The investors on the exchanges include 1,886 foreign institutional
investors and 883 domestic institutional investors along with about
0.22 million retail investors. There are also about 400 brokerage
houses which are members of the PSX as well as 21 asset
management companies. PSX is among the world's best performing
stock market's, between 2009 and 2015 it delivered a 26% a year. In
December 2016, PSX sold 40% strategic shares to a Chinese
consortium for $85 million.
 Important definition
• COMPANY: A registered association which is an artificial legal person,
having an independent legal, entity with a perpetual succession, a
common seal for its signatures, a common capital comprised of
transferable shares and carrying limited liability.
• Incorporated association: A company comes into existence when it is
registered under the Companies Act (or other equivalent act under
the law). A company has to fulfil requirements in terms of documents
(MOA, AOA), shareholders, directors, and share capital to be deemed
as a legal association.
• Artificial Legal Person: In the eyes of the law, A company is an artificial
legal person which has the rights to acquire or dispose of any property, to
enter into contracts in its own name, and to sue and be sued by others.
• Separate Legal Entity: A company has a distinct entity and is independent
of its members or people controlling it. A separate legal entity means that
only the company is responsible to repay creditors and to get sued for its
deeds. The individual members cannot be sued for actions performed by
the company. Similarly, the company is not liable to pay personal debts of
the members.
• Perpetual Existence: Unlike other non-registered business entities, a
company is a stable business organisation. Its life doesn’t depend on the
life of its shareholders, directors, or employees. Members may come and
go but the company goes on forever.
• Common Seal: A company being an artificial legal person, uses its
common seal (with the name of the company engraved on it) as a
substitute for its signature. Any document bearing the common seal
of the company will be legally binding on the company.
•
Limited Liability: A company may be limited by guarantee or limited
by shares. In a company limited by shares, the liability of the
shareholders is limited to the unpaid value of their shares. In a
company limited by guarantee, the liability of the members is limited
to the amount they had agreed upon to contribute to the assets of
the company in the event of it being wound up.
• Stock (share): The stock (also capital stock) of a corporation is all of
the share A single share of the stock represents fractional ownership of the
corporation in proportion to the total number of shares into which
ownership of the corporation is divided.
• STOCK EXCHANGE: A stock exchange, securities exchange is a facility
where stock brokers and traders can buy and sell securities, such
as shares of stock and bonds and other financial instruments.
• Securities traded on a stock exchange include stock issued by listed
companies, pooled investment products and bonds. Stock exchanges often
function as "continuous auction" markets with buyers and sellers
consummating transactions via open outcry at a central location such as
the floor of the exchange or by using an electronic trading platform