Chapter 1

Question 1

When an Entity is obligated to be registered as a company?

Answer 1

A business consisting of more than 20 persons is obligated to be registered as a company by filing the required documents with registrar with certain exceptions.

Question 2

Minimum Members Required In
Public?
Public Unlisted ?
Private Other than SMC ?
SMC?

Answer 2

7
3
2
1

Question 3

What is Doctrine of corporate personality?

Answer 3

the law recognises a company as a person, with legal rights and obligations similar to those of ordinary individuals.

Question 4

characteristics of company as an artificial person?

Answer 4

1) company may enter into contracts with other persons
2) company itself is liable for the Debts
3) A company owns its own assets.
4) debtor of the company owes the money to the company
5) Companies are managed by their directors,small companies, the shareholders and directors may be the same individuals, but in large companies, the directors might hold a small proportion of the shares or even no shares at all.
6) personally liable to pay tax
7) the company itself that is liable in case of breach of Law

Question 5

What are Consequences of separate personality?

Answer 5

 limited liability of the owners of business
 separation of ownership from control
 transfer of ownership and perpetual succession.

Question 6

Trasfer of shares easy ?

Answer 6

transferred easily,without seeking any approval

Question 7

Rights with Shares

Answer 7

right to receive a portion of any dividend paid by the company or the right to attend and vote at general meetings of the company

Question 8

Liability of company?

Answer 8

A company is
fully liable for all its debts and other liabilities

Question 9

Libility of Owners?

Answer 9

The liability of the owners of a
company for the debts of the company is limited to the amount of their investment except partly paid shares

Question 10

Memorandum and Articles purpose ?

Answer 10

Used for External Stakeholders and Internal Procedures Within Company Respectiviely

Question 11

What is Body Corporate?

Answer 11

1) a company incorporated under Companies Act, 2017 or company law.

2) a company incorporated outside Pakistan, or

3) a body corporate declared as body corporate in the relevant statute
Exceptions:
1) co-operative society registered
2) Any other entity, not being a company as defined in Companies Act, 2017 or any other law for the time
being,

Question 12

What is a Foreign Company?

Answer 12

Body corporate incorporated outside Pakistan

1) has a place of business or liaison office in Pakistan whether by itself or through an agent, physically or
through electronic mode; or

2) conducts any business activity in Pakistan in any other manner as may be specified

Question 13

Company Limted By shares

Answer 13

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

Advantage:
Can raise additonal Capital by issue new shares

Question 14

company limited by guarantee?

Answer 14

Liability Limited upto amount gurranteed to contribute at time of winding up.
May have share capital or not

Question 15

Private Company other than SMC?

Answer 15

a) restricts the right to transfer its shares, save as otherwise provided in the Act;

b) limits the number of its members to fifty not including persons who are in the employment of the
company; and

c) prohibits any invitation to the public to subscribe for the shares or debentures of the company:

Question 16

Securities

Answer 16

equity securities (shares)
and
debt securities (debentures)

Question 17

what is subsidiary company?

Answer 17

In which a holding company:
a) controls the composition of the board; or
b) exercises or controls more than one-half of its voting securities either by itself or together with one or
more of its subsidiary companies.
c) Control maybe Direct or Indirect

Question 18

SECP Offices And Power?

Answer 18

Head office is at the Federal Capital, Islamabad and it has eight regional offices.
Power given by:
1) Companies Act, 2017
2) Securities and Exchange Commission of Pakistan Act, 1997.

Question 19

Power And Duties Of Registrar?

Answer 19

1) registration of companies
2) receiving various documents which
the companies are required to submit
3) keeps the record of mortgages and charges
4) keeps track of company routine documents
5) powers to call the officers of the company
6) inspect and seize the books and records

Question 20

Who are members of a company ?

Answer 20

1) subscribers to the memorandum of association
2) to whom is allotted, or who becomes the holder of any class or kind of shares
3) any person who has agreed to become a member of the company.
4) whose names are entered; in the register of members, are members of the company

Question 21

Voting can be done through?

Answer 21

video-link or
by proxy or
by means of postal ballot

Question 22

Ordinary resolution and Special resolution

Answer 22

1) passed by a simple majority of such members of the company entitled
to vote
2) passed by a majority of not less than three-fourths of
such members of the company entitled to vote

not less than 21 days‘ notice given before general meeting