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company law > Chapter 3 > Flashcards

Chapter 3 Flashcards

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1
Q

What is Director

A

person appointed by members
ménage affairs of Company
it can any one occupying position
by what ever name

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2
Q

Role

A

fiduciary behavior
as agent according to AOA

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3
Q

Eligibility

A

natural person
member
additional criteria by AOA

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4
Q

Exception to be member

A

whole time director
CEO
Nominee director

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5
Q

Penality to bankrupt acting director

A

2 year imprisonment
fine
or both

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6
Q

Ineligilibity of director

A

not member
Cody corporate
minor
unsound mind
No NTN ( Commission grant exemption )
Insolvent by court
Convicted by court
lack fiduciary behavior
under any provision of law

Additional for listed

defaulter by financial institution
he or his spouse is broker or director at brokerage house

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7
Q

First director

A

By subscriber
till first AGM
can be increased by member

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8
Q

Subsequent director

A

by members
at AGM
3 years
not having share capital can reduce

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9
Q

Casual Vacancy of listed Company

A

by director
90 days

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10
Q

Casual Vacancy of unlisted

A

equal to minimum numbers of = not required

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11
Q

tenure of casual vacancy

A

remaining period

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12
Q

Nominee director

A

Govt
body corporate
Till pleasure of nominating body
creditors

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13
Q

1.Fixation of number of directors (election )

A

existing directors
35 days before AGM or EOGM
can be changed in General meeting

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14
Q
  1. Send notice of meeting (election )
A

21 days before meeting
name of retiring directors & number of directors to be appointed

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15
Q
  1. Filing intention to became director (election )
A

14 days before meeting
file notice with company
can withdrawn at anytime

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16
Q

4.List of Candidates to be transmitted (election )

A

send list to members
7 days before AGM
publish notices ( if listed )

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17
Q
  1. If candidates less or equal to number fixed(election )
A

all selected unopposed

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18
Q

6.If candidates greater than number fixed (election )

A

conduct poll
votes ( No of shares * directors to be appointed )
highest vote wala stand elected
can give more than one director

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19
Q
  1. File the consent with registrar (election )
A

15 days of appointment

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20
Q

Full steps to select a director

A

1.Fixation of number of directors (election
2. Send notice of meeting (election )
3. Filing intention to became director (election )
4.List of Candidates to be transmitted (election )
5. If candidates less or equal to number fixed(election )
6.If candidates greater than number fixed (election )
7. File the consent with registrar (election )

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21
Q

Invalid election

A

member with 10% or more voting power
apply to commision
within 30 days of election

22
Q

fresh election

A

member with requiring share holding ( 100/No of directors)
may apply to company that hold fresh election
within 30 days company shall proceed
no reduction in no of directors
listed company shall follow commission

23
Q

procedure of election in not having share capital

A

by member in general meeting
AOA = manner

24
Q

past acts of disqualified director

A

valid

25
Q

vacation of directors office

A

ineligible
additional grounds
absent 3 BOD meetings consecutive without leave
accept loan without approval of members ( Not apply of financial institutions
office of profit w/o approval of member s ( not applies of CEO & Technical advisor

26
Q

Removal of director ( by members , not by directors )

A

pass resolution and votes against it not equal or exceed the resolution

27
Q

removal of elected directors

A

votes against resolution not equal to least number of votes obtained by elected director in last election

27
Q

removal of elected directors

A

votes against resolution not equal to least number of votes obtained by elected director in last election

28
Q

Removal ofappointed director ( Casual , un opposed)

A

avg votes ( no of shares * directors appointed at AGM / directors for the time being

29
Q

appointment of nominee director by govt & body corportare

A

if investment is made
deemed director
considered for minimum no of director
hold office up to pleasure

30
Q

Nominee director by creditor

A

contractual arrangement
not considered

31
Q

Duties

A

act according to AOA
in best interest of company , employee, SH
perform with reasonable care
disclose interest if any
commission may provide framework
shall not :
obtain undue gain for himself or relative
involve in conflict of interest
assign office
negligence may be ratified

32
Q

Power with approval in general meeting

A

1 sell of dispose subsidiary of co.
2 sell lease or otherwise dispose of undertaking of sizeable part
( Unless company’s business)
3 remit or give extension for repayment ( specified person )

Approval lapse in one yr

33
Q

Powers without approval

A

1.issue share ,debe, or borrow money
2. Make loan
3. make investment
4. approve F/s (all)
5. declare interim dividend
6. Bonus for employees
7. Capital expenditure ( exceeding amount notified )(
8. undertake lease obligation ( exceeding amount as notified)
9.authorise director tin a transaction
10. to write-off material debts , inventories and advances
11. to settle material litigations
12. takeover acquiring controlling interest in company
13. appoint or remove CEO
14. fill casual vacancy of director

can’t sell undertaking which result closure of business

34
Q

BOD meeting frequency

A

each quarter ( for public Co.)

35
Q

quorum

A

Listed ( 1/3 or 4 wichever higher ) + video conf: + Casual vacancy ( remaining is quorum
Unlisted = AOA

36
Q

Validity of resolution through discussion

A

. approved by majority of directors
. Valid & effective as if passed in meeting

37
Q

rules of resolution through discussion

A

1allowed provided:
.circulated to all director
. along with naccessary papers
. signed in writing
2. no revocation
3. noted in next meeting minutes

37
Q

record of resolution through discussion

A

1at register office ( every co.)
2. signed by chairman
3.copy of minutes send to every director within 14 days of meeting
4.physically - 10yr
electronically - permanent

38
Q

non executive director

A

1.not from executive management
2. does not give whole time
3. Not beneficial owner of co. or associated
4. receive no remuneration except meeting fee
5. give outside viewpoint

39
Q

Non executive liable for omission

A

no unless:
1. was done with his consent
2. did not act diligently

40
Q

Loan to director(spouse & minor or holding )

A

approval by resolution
approval of commision( Listed )
no restriction for n=financial institutions

41
Q

Political contribution / Gift to members

A

not allowed

42
Q

Assignment of office

A

not allowed however alternate director is possible if :
1. absent from Pakistan for 90 or more days
2. approved by board
3. till he returns to Pakistan

43
Q

remunerations

A

for meeting :
not exceed scale approvd by co. directors according tom AOA
for other/extra :
determined by directors or co. according to AOA

44
Q

Director + relative cash transaction

A

through banking

45
Q

Director + relative non cash transaction

A

approved by members in GM
notice of resolution shall mention mention particulars including valuation
restriction also applies director of holding co.

46
Q

Independent director

A

no relation with co. management & related party

47
Q

Eligibility criteria of independent director

A
  1. graduate/ professional with 5 yr experience in relevant field
  2. 15 yr experience + reasonable time , training program )
48
Q

in-Eligibility criteria of independent director

A
  1. CEO of co. or associated ( last 3 yr)
  2. Employee of co. or subsidiary ( last 3 yr )
    3.a person had material business relationship with co. ( last 3 yr)
  3. Nominee director
  4. person had cross-director relationship or significant relationship
  5. director served board for 3 consecutive terms
    7.close relative of co. promoter, director , major share holder

Public sector com.= not a govt employee & body corporate controlled by govt

49
Q

responsibility of institute maintain data bank

A
  1. maintain data base of eligible and willing persons
  2. determine terms & conditions for inclusion name in data bank
50
Q

responsibility of individual ( ind director )

A
  1. for accuracy o& updating of information
  2. to ensure compliance with criteria & other requirements

company law (2 decks)

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