Incorporation of Companies
Obligation to register Certain, associations, partnerships etc., as Companies: u/s 14 1
Company
Association
Consisting of more than 20 persons
Objects Acquisition of Gain
Partnership
Unless it is registered under this Ordinance Shall not be formed
Except, it is Registered society, association other than partnership Joint family carrying on joint family business Partnership of two or more joint families, member does not exceed twenty Partnership formed to carry on practice as lawyers, accountants, or any other profession where practice as Limited Liability Company is not permitted.
Mode of Forming a Company u/s 15
COMPANY Public Private COMPLIANCE Subscribing there names to memorandum of association and complying with registration requirements under this ordinance form company
3 or more persons
1 or more persons 1 person (Single Member Company) A company thus formed may be with or without limited liability, that is to say, Company limited by shares; Company limited by Guarantee; or Unlimited Company
Section 14: Comes in force when,
Association Business
With Gain/Profit Motive & Number of members exceed 20
Prior approval of the ministries/Departments etc. is required to be obtained before incorporation of Companies Companies Approval from a. A banking company 1) Ministry of Finance 2) State Bank of Pakistan b. A non Banking Finance Company (NBFC) Securities and Exchange Commission of Pakistan c. A security Service Providing Company Interior Division d. A corporate brokerage house Stock Exchange (for transfer of membership card in favor of proposed company) e. A money exchange company State Bank of Pakistan f. An Association not for profit u/s 42 of the License from SECP Companies Ordinance, 1984 g. A trade Organization u/s 42 License from Ministry of Commerce
Requirements for Registration of a New Company
1. Availability of Name: The name chosen should not be inappropriate, deceptive, prohibited u/s 37 2 or designed to exploit or offend the religious susceptibilities of the people and neither identical nor closely resembling with the name of an existing company. 2. Documents for registration of a limited company: Following documents are required to be filed with the registrar 3 for registration of a private limited company;o Copy of NIC or Passport, of each subscriber and witness o Duly signed Copies of Memorandum and Articles o Form 1:Declaration of compliance with prerequisites for formation o Registration/filing fee o Authorization by sponsors: To make good the deficiencies, if any , in memorandum and articles 3. Additional Requirements for Incorporation of a Company o Security Object Company: Bio-data, four attested photographs of each subscribers Bank statement of the subscribers aggregate wealth not less than 1.5 million NOC from Ministry of Interior for security objects of company o Single Member Company: Form S1
Section 37: Prohibition of Certain Names 1. Inappropriate or deceptive or designed to exploit or offend the religious susceptibilities of people, in the opinion of commission 2. Name identical or resembling with existing company 3. No company shall be registered by a name which contains any words suggesting or calculating to suggest; Patronage to Pakistani or Foreign Head of State; Any connection with government or authority Any connection with any Corporation under Federal or Provincial law Patronage of any foreign Government or any international organization 4. Decision of Commission shall be final whenever question arises as to whether or not the name of a company is in violation of the foregoing provisions of this section. 5. No company other than a banking company is allowed to use the word bank or other derivative; 3 Registrar: Means a registrar, an additional registrar, a joint registrar, a deputy registrar or an assistant registrar, performing under this Ordinance the duty of registration of Companies;
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All requirement of a private limited company shall mutatis mutandis 4 apply o Association not for profit License issued by SECP In case of trade body, License by Ministry of Commerce List of Promoters, their bio-data Names of companies in which promoters hold any office, o Transfer of Membership of Single Member Company to a new member Within 15 days from such transfer, file Form 5 as set out in Form S1 o Change in Status of a single member Company into a private Company: Special Resolution for change of status Alteration in articles within 30 days Transfer Shares within 7 days Appoint & Elect directors within 15 days Notify appointment on Form 29 within 14 days Form S2 within 60 days o Company becoming a single member Company: Special Resolution for change in status (from Private Company) Alteration in articles Obtain approval of Commission Form S4 Transfer shares in the name of Single Member Company Notify Change in Board of DirectorsForm 29 Certified copy of the order containing the approval Notice Form S5 Nomination of Nominee directors Form S1 4. Obtaining Certified Copies of Memorandum, Articles & Certificate of Incorporation.
Application procedure for Availability of Name
The incorporation of a company involves several steps first step is seeking the availability of name from the registrar concerned Application can be made on a plain paper addressed to the registrar concerned On acceptance of application , the name is reserved for a period of 30 days o Subject to submission of prescribed documents with application & o Prescribed fee
Requirements after Incorporation for Every Company (Public or Private)
1) Directors: a) First Directors: i) Number and name determined b the majority of subscribers of memorandum ii) Until so determined, all the subscribers who are natural persons shall be deemed to be directors iii) Appointment is to be notified to the registrar Form 29, within 14 days from the date of incorporation. b) Subsequent Directors: i) Election is required to be held at the first Annual General Meeting ii) Elected directors are to hold office for a period of three years
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Mutatis Mutandis: Equally applicable Form: Means a form set out in any of the schedules or prescribed;
iii) Casual vacancy may be filled up by the other directors for the remainder period of the term. 2) Chief Executive: a) First: i) Directors are required to appoint the first chief executive ii) not later than fifteen days from the date of incorporation b) Subsequent i) Within fourteen days from the date of election. 3) Auditors: a) First: i) Appointed by the directors ii) Within sixty days from the date of incorporation b) Subsequent Auditors in each AGM of the company. 4) Company Secretary: a) Single Member company is also required to appoint Company Secretary b) Within 15 days of incorporation or of becoming a single member company or from the date of vacancy of office c) Notify appointment Form 29, within 14 days 5) Notify to Registrar a) Any appointment, election or change in Directors, Chief Executive, Auditors, Chief Accountants, legal adviser Form 29, within 14 days [Section 205] b) Registered Office of the Company or Change in Registered Office Form 21, within 28 days from date of incorporation 6) A private Company may commence its business immediately after its incorporation 7) Annual General Meeting (AGM) u/s.158 a) First i) Held within eighteen months from the date of incorporation b) Subsequent i) Once at least in every calendar year ii) Within a period of four months following the close of its financial year and not more than fifteen months after holding of its last preceding AGM 8) Audited Accounts u/s. 233 a) 1st Accounts i) 1st accounts, since the incorporation of company, are laid before AGM b) Subsequent Accounts i) Preceding accounts, made up to the date ii) Not earlier than 4 months from the date of AGM 9) Annual Return to Registrar a) Prescribed Form A once in each year b) Made as on i) The date of Annual General Meeting ii) Last day of the calendar year where no such meeting is held 10) Increase in paid up capital a) Required to offer new shares to existing shareholders b) Circular u/s. 86(3) to all the shareholders strictly in proportion to the shares held by them 11) Allotment: i) Return of Allotment Form 3, within 30 days from date of allotment ii) Partly paid shares are not allowed to be issued at all.
iii) Required to issue share Certificates within 90 days from the date of allotment; or within 45 days after the date of filing of application for registration of transfer of shares 12) Mortgage or Charge a) Particulars filed and registered within 21 days after the date of its i) Creation ii) Modification or iii) Satisfaction
Specific Requirements after Incorporation for Public Companies
1) Listed Companies a) Required to file list of members on floppy diskette to Commission b) 3 copies of audited accounts to SEC, Stock Exchange & registrar within 30 days of holding of AGM c) Required to appoint a Company Secretary 2) Associations a) Required to file annual return on form B 3) File list of Directors & Consent a) Within 7 days of incorporation b) Thereafter before election/appointment of Directors and Chief Executive 4) Commencement of Business a) Entitled after obtaining Commencement of business Certificate from registrar concerned 5) Statutory Meeting a) Required to be held within a period of i) Not less than three months & ii) Not more than six months from the date of commencement iii) A private Company which converts itself to public company after one year of incorporation is not required to hold such statutory meeting 6) Statutory Report a) Circulated to members; and b) 5 Certified Copies filed with registrar in prescribed manner c) At least 21 days before the date of Statutory Meeting. 7) Filing copies of Accounts a) Two copies of audited accounts signed b) Filed with registrar in prescribed manner c) Within 30 days from the date of their AGM
Specific Requirements after Incorporation for Private Companies
1) Death of Single Member of SMC a) Nominee director is required to inform registrar concerned b) Provide particulars of the legal heirs c) In case of impediment, report circumstances seeking the directors Form S3, within seven days of death 2) Decisions taken by Single Member or Sole director a) Required to be drawn up in writing and recorded in the minutes book b) By Company Secretary
