Chapter 1

Question 1

Memorandum of association(MOA)

Answer 1

Constitutional document that focuses on external stake holders is called memorandum of association

Question 2

Articles of association (AOA)

Answer 2

Bye-laws which focuses on internal procedures of company

Question 3

Body corporate “or” Corporation Body

Answer 3

corporate or corporation includes-
a company incorporated under this Act or company law; -
a company incorporated outside Pakistan, or-
a body corporate declared as body corporate in the relevant statute

but does not include-
A co-operative society and
And statutory body which federal government specified by notification

Question 4

Foreign company

Answer 4

Means any company or body corporate incorporated outside Pakistan, which: -

has a place of business or liaison office in Pakistan whether by itself or through an agent,physically or through electronic mode; or-
conducts any business activity in Pakistan.

Question 5

Companies limited by shares

Answer 5

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

Question 6

Companies limited by guarantee

Answer 6

Liability of owners is limited to the amount member guarantees to contribute in the event thatthe company goes into liquidation
 The company may or may not have share capital
 If Company has share capital; Liability shall also include amount unpaid on shares (if any)

Question 7

Unlimited companies

Answer 7

This has all advantages of a normal company except that, liabilityof itsmembersisnotlimited

Question 8

Private Company

Answer 8

Private company means a company which by its articles

 Maximum number of members to 50(members jointly holding shares shall be counted as 1 member)
 Right to transfer the shares by its members,
 Invitation of subscriptions from general public for its shares debentures or Redeemable capital.

Question 9

Single Member Company

Answer 9

Which consists of a single member who is director of the company.[In these companies (SMC-PVT) Limited is added to the name]

Question 10

ASSOCIATION NOT FOR PROFIT

Answer 10

SECP (Securities & Exchange Commission of Pakistan) shall grant license if following conditions are fulfilled
 Such association may be set up for any of the following purposes -Commerce
- Arts
- Science
- Religion
- Health, - Education, - Research, -Sports
- Environment Protection
-Social Welfare
- Charity
- Any other useful object
 It shall apply its profits (if any) in promoting its objects
 It shall prohibit the payment of any dividend to its members and
 Its objects and activities are not and shall not, at any time, be against the laws, public order,
security, sovereignty and national interests of Pakistan

SECP shall grant license on such conditions and subject to such regulations as it thinks fit.

Question 11

Registrar

Answer 11

Means a registrar, an additional registrar, an additional joint registrar, a joint registrar, a
deputy registrar, an assistant registrar or such other officer as may be designated by SECP,
performing duties and functions under this Act.

Question 12

Registrar
Powers and duties

Answer 12

 Registration of companies
 Receiving various documents under the Act.
 Keeps track of company routine documents
 He keeps the record of mortgages and charges (explained in a further chapter)
 Can call the officers of company for information and explanations
 Empowered to inspect the books and records of the company.
 May seize the books and records, if think necessar

Question 13

SECP (Securities & Exchange Commission of Pakistan)

Answer 13

Head office of SECP in Islamabad. It has 8 regional offices ( called company registration offices ) i.e 1 on Islamabad, 4 in each provincial capitals and 1 each in Multan, Faisalabad and Sukkur.

Question 14

Authorities within the company
Member

Answer 14

Members includes
1.Subscribers to memorandum of association, who become members on its registration.
2. A person who becomes shareholder of any class or kind of shares in the company (If company has share capital).
3. A person who agrees to become a member of the company ( If company does not have shares capital and whose name is entered in the register of members.

Question 15

Special resolution

Answer 15

A resolution
- which has been passed by a majority of not less than 3/4th of such members entitled to vote
as are present in person or by proxy or through postal ballot at a 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:

Question 16

Ordinary Resolution

Answer 16

Ordinary Resolution means a resolution which has been passed at a Gerneral meeting by a simple majority of members entitled to vote as are present in a person or by proxy or through postal ballot at Gerneral meeting.

Question 17

Voting rights

Answer 17

The right of a member of a company to vote on any matter in a meeting of the company either
present in person or through video-link or by proxy or by means of postal ballot.