chapter 1 Flashcards
What is “Holding Company” ?
Means a company which is another company’s holding company if, but only if , that other company is its subsidiary
What is “Subsidiary company “?
In relation to any other company, it means company in which the holding company:
●Holds the Composition of the Board Or
●Exercise or controls more than one-half of its voting securities either by itself or together with one or more of its subsidiary companies
●However, such class or classes of holding companies shall not have layers of subsidiaries beyond such numbers, as may be notified.
What is “ Private Company “?
Single member company :
Which consists of a single member who is director of the company
[In these companies (SMC-PVT) Limited is added to the name]
Other private company :
Company can be registered by at least two members and it restricts
●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
What is Body corporate “or” Corporation ?
Body 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 registered under any law relating to the registration of co-operative societies; or
●Any other entity, not being a company as defined in this Act or any other law for the time being which the concerned Minister of the Federal Government may, by notification, specify in this behalf
Association Not for Profit
SECP shall grant license if following condittons are fulfilled
●Such association may be set up for any of the following purposes
-Commerce
-Science
-Social Welfare
-Research,
-Education,
-Sports
-Environment Protection
-Arts
-Religion
-Charity
-Health
-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.
Association shall enjoy all privileges of a limited company and be subject to all its obligations, except using the ending word(s) “Limited” or “(Guarantee) Limited”
License may be revoked at any time by SCEP
●SECP shall give a notice in writing to Co, of its intention to do so
●SECP shall provide an opportunity to be heard to the association.
On revocation, registrar shall again add the ending words and it shall cease to enjoy exemptions and priviliges granted by license
Conditions for revocation of the Licence
●Company/management has failed to comply with any terms or conditions of licence;
●Any of the requirements of this section or any connected regulations are not met;
●Affairs of company are conducted in a manner prejudicial to public interest; or
●Company has made a default in filing with registrar its financial statements or annual returns for immediately preceding 2 consecutive financial years;
●Company has acted against the interest, sovereignty and integrity of Pakistan, the security of the State and friendly relations with foreign States;
●Number of members is reduced, below 3;
●The company is
- Conceived or brought forth for unlawful or fraudulent activities;
- Run and managed by persons who fail to maintain proper and true accounts or they commit fraud, misfeasance or malfeasance in relation to the company;
- Run and managedby persons involved in terrorist financing or money laundering:
- Managed by persons who refuse to act according to MOA of A0A or provisions of this Act or failed to carry out directions or decisions of SECP or the registrar; or
- Not carrying on its business or is not in operation for 1 year; or
●It is just and equitable that the licence should be revoked:
