Chapter 2 "Memorandum and Articles" Flashcards
Define Memorandum and writes classes of memorandum?
Memorandum of association is a constitution of a company which includes name, pace, principal line of business and capital clauses.
CLAUSES OF MEMORANDUM: 1- Name clause 2- Registered office clause 3- Principal line of business clause 4- Liability clause 5- Authorized capital clause 6- Undertaking and subscription clause.
What are the restrictions/prohibition on name of a company?
A company shall not be registered with name which:
1- is identical or closely resembles with existing company.
2- is inappropriate, undesirable or deceptive.
3- is selected to exploit or offend religious feelings of people.
4- contains words which are prohibited or restricted by commission.
5- Any other ground as may be specified.
How the name of a company will rectify and change?
RECTIFICATION BY REGISTRAR:
If a company is registered with a defective name, regsitrar can issue order to rectify its name and company will have to rectify within 30 days of order.
If a company fails , Registrar;
- may select and enter a new name
- shall issue a new certiiicate of incorporation.
RECTIFICATION BY COMPANY:
Company change as follows;
-Company shall obtain written permission of registrar and shall pass a special resolution.
-Company shall apply to registrar to obtain approval.
- If approved a registrar shall enter new name in register and shall issue new certificate of incorporation.
What is the time period up to which company shall mention its old name along with new after the change in name & what are the liabilities after?
After issuance of certificate of incorporation, company shall mention its old name along with new name for 90 days & change in name of company shall not effect:
- any rights and liabilities of company
- any legal proceedings by or against the company.
Explain the publication of name?
1- Every company shall display name and incorporation number of a company in english or urdu outside every registered office and every office or place of business at prominent position.
Every company shall display a certified copy of certificate of incorporation at every place of business.
2- Name of company shall also be engraved on seal of company in english or urdu.
3- Name, address of registered office, telephone, fax, email and website address shall be mentioned on all official documents or notes.
What is registered office?
Registered office is a=the address of company for receiving all its communication.
Every company shall notify the registrar the complete address of its registered office within 30 days of incorporation.
It may or may not be head office of a company.
What is the procedure for change in registered office within same city?
1- Company shall pass board resolution.
2- Company shall notify Registrar within 15 days.
What is the procedure for change of registered office to different city but within same province?
1- Company shall pass board resolution.
2- Company shall pass special resolution.
3- Company shall notify registrar within 15 days.
4- Physical record shall also be transferred to the new registrar.( if registered office has been shifted to jurisdiction of another registrar)
What is the Procedure for change of registered office to different province/ change in registered office clause?
1- Board resolution.
2- Special resolution.
3- Application to obtain confirmation from commission.
4- A copy of order shall be sent to company and Registrar within 7 days of the order.
5- Company shall file Registrar a copy of altered Memorandum of association within 30 days of order of commission. However Commission may extend the time.
6- Registrar shall issue the same and shall issue a certificate.
7- Physical record of the company shall also be transferred to the new registrar.
What is principal line of business?
Principal line of business means the business in which company’s:
- substantial assets are held or
- substantial revenue is earned
whichever is higher.
How to change the principal line of business clause?
Following procedure is followed:
1- Special resolution.
2- Within 30 days company shall file amended memorandum to registrar.
3- Registrar shall register the alteration. If change is not in line with name of the company, Registrar may order company to change the name also.
APPROVAL FROM COMMISSION IS NOT REQUIRED TO CHANGE THIS CLAUSE.
What is articles of association?
Articles contains rules and regulations on internal affairs of the company
What are the contents/Information which should be contained in articles?
These contain rules and regulation regarding following:
1- Business 2-Tramsfer of shares 3- Alteration of capital 4- Voting an other rights attached to different classes of shares 5- Notices and proceedings of general meeting 6- Manners of voting od members 7- Proxy instrument 8- Number of directors, their powers and duties 9- Proceedings of directors’ meeting 10- Disqualification of directors and filing of vacancies 11- Minute books 12- Dividend and reserves 13- Accounts 14- The seal 15- Indemnity 16- Winding up
Which companies are required registered their articles?
A company limited by guarantee and an unlimited company are required to register their articles. Its articles shall also state:
- Amount of share capital (if company has share capital)
- Number of members (If company does not have share capital)
Discuss registration of articles in terms of company limited by shares / What options are available to company limited by shares for registration of articles?
A company limited by shares has following options:
- It may not register its Articles, and may adopt Table A as its articles, or
- It may register its own Articles. However, Table A shall still apply if articles do not discuss a content mentioned in Table A.
