Chapter 2 Flashcards
What is the Memorandum of Association?
: It is the constitution of a company that includes clauses like Name, Place, Principal Line of Business, Liability, and Capital.
What are the main clauses required in the Memorandum of Association?
Name Clause, Registered Office Clause, Principal Line of Business Clause, Liability Clause, Authorized Capital Clause, and Undertaking or Subscription Clause.
What does the Name Clause state?
The name of the company, including words like “Limited,” “(Private) Limited,” “(Guarantee) Limited,” or “(SMC-Private).”
What information is required in the Registered Office Clause?
A: The province or region where the company’s registered office is situated.
What is the Principal Line of Business Clause?
A: It states the main business activities of the company, excluding any restricted activities.
What does the Liability Clause specify?
It defines the liabilities of members, whether limited by shares, guarantee, or unlimited.
What is outlined in the Authorized Capital Clause?
A: The maximum share capital the company can issue and the division of capital into shares of fixed nominal value.
Q: What is included in the Undertaking or Subscription Clause?
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A: An undertaking to form the company and to comply with its memorandum
Q: What is required for printing and signing the Memorandum of Association?
A: It must be printed, signed by subscribers, and include their personal details and a witness.
When is prior approval needed for a company name?
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A: If the name implies connection with the government, religious exploitation, or any restricted activity
What is prohibited when selecting a company’s name?
Names that are identical or closely resemble existing companies, are inappropriate, exploit religious feelings, or require prior approval by the Commission.
What are examples of names requiring prior approval from the Commission?
A:
• Names implying patronage with the Head of State or Government.
• Connection with Federal or Provincial Government or statutory bodies.
• Association with international organizations or foreign governments.
• Names implying Modaraba management or restricted business.
What happens if the name of the company violates the Registrar’s provisions?
The decision of the Commission is final regarding whether the name violates the rules.
What does the Borrowing Power of the Company entail?
The Memorandum and Articles allow the company to borrow money and issue other securities not based on interest.
What must each subscriber include in the Authorized Capital Clause?
Their agreement to take at least one share, with the number of shares opposite their name.
What must the Principal Line of Business Clause always match?
It must match the name of the company
What is required when subscribers sign the Memorandum?
Names, occupations, nationality, residential addresses, and other prescribed details.
What does the Liability Clause cover for companies limited by guarantee?
It specifies the amount members agree to contribute at the time of winding up.
What are the implications of the Undertaking or Subscription Clause?
Subscribers agree to comply with the memorandum and take shares in the company.
Can existing companies continue with their old memorandum?
Yes, existing companies can continue with their existing memorandum unless changes are required.
What does the Name Clause in the Memorandum of Association include?
The name of the company, including terms like “Limited,” “(Private) Limited,” “(Guarantee) Limited,” or “(SMC-Private).”
What is the purpose of the Principal Line of Business Clause?
A: It defines the company’s main business activities, ensuring they are not prohibited or restricted (require approval
What does the Liability Clause detail?
A: It outlines the liabilities of members, whether limited by shares, guarantee, or unlimited, and the amount they agree to contribute at winding up.
What is stated in the Authorized Capital Clause
The maximum share capital the company can issue and its division into shares of fixed nominal value.
How must the Memorandum of Association be printed and signed?
A: It must be printed, divided into numbered paragraphs, signed by subscribers, and include their details and a witness’s signature.
What powers are deemed to the company through the Memorandum and Articles?
A: The power to borrow money and issue securities not based on interest.
What names are prohibited for a company under the Registrar’s opinion?
: Names identical to or resembling an existing company, inappropriate, religiously offensive, deceptive, or restricted.
What are examples of names requiring prior approval by the Commission?
Names suggesting:
• Patronage with the Head of State.
• Connection with the Government or statutory bodies.
• Modaraba management.
• Foreign or international organizations.
For how long must a company mention its old name along with its new name after a name change?
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A: For 90 days:
• Outside every office or place of business.
• On every document or notice of the company
Does a company’s change of name affect its rights and liabilities?
A: No, the change of name does not affect:
• Any rights or liabilities of the company.
• Any legal proceedings by or against the company.
What must every company display outside its registered office or place of business?
A:
• The name of the company.
• The incorporation number.
• These details must be displayed in English or Urdu.
Where must a certified copy of the certificate of incorporation be displayed?
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A: At every place where the company conducts business
What additional details must a company include on all official documents or notices?
• The address of its registered office.
• Email address.
• Website address (if applicable
What happens to ongoing legal proceedings if a company changes its name?
A: Legal proceedings continue unaffected by the name change
In what languages must a company’s name and incorporation number be displayed?
A: In English or Urdu.
Where should the company name and incorporation number be displayed?
A:
• Outside the registered office.
• Outside every office or place of business.
Does a company need to republish its legal documents after a name change?
A: No, a name change does not affect any ongoing legal documents, rights, or liabilities of the company.
What must be included in the company’s notices and official documents after a name change?
A:
• The new name of the company.
• The address of the regist ered office.
• Contact information, such as email and website addresses.
Why is it necessary to mention the old name along with the new name for 90 days?
A: To ensure transparency and avoid confusion for stakeholders during the transition period.
What document must be displayed prominently at business locations?
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A: A certified copy of the certificate of incorporation
What is the significance of displaying a company’s incorporation number?
It ensures authenticity and compliance with legal requirements
Is it mandatory for a company’s name to be visible to the public?
A: Yes, it must be displayed prominently outside all offices and places of business.
