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THE
COMPANIES ORDINANCE, 1984
(XLVII OF 1984)
AN
ORDINANCE
To consolidate and amend the law relating to companies and certain other
associations
WHEREAS
it is expedient to consolidate
and amend the law relating to companies and certain other associations
for the purpose of healthy growth of the corporate enterprises, protection
of investors and creditors, promotion of investment and development
of economy and matters arising out of or connected therewith:
AND WHEREAS
the President is satisfied
that circumstances exist which render it necessary to take immediate
action:
NOW, THEREFORE,
in pursuance of the Proclamation of
the fifty day of July, 1977, and in exercise of all powers enabling
him in that behalf, the President is pleased to make and promulgate
the following Ordinance:--
PART
I
PRELIMINARY
1. Short
title, extent and commencement:-
(1) This Ordinance
may be called the Companies Ordinance, 1984.
(2) It extends to
the whole of Pakistan.
(3) This section shall
come into force at once and the remaining provisions of this Ordinance
shall come into force on such date as the Federal Government may,
by notification in the official Gazette, appoint, and different dates
may be so appointed for different provisions.
2. Definitions:-
(1) In this Ordinance,
unless there is anything repugnant in the subject or context.--
(1) "article"
means the articles of association of a company as originally framed
or as altered in accordance with the provisions of any previous Companies
Act, or of this Ordinance, including so far as they apply to the company,
the regulations contained in Table A in the First Schedule;
(2) "associated
companies" and "associated undertakings"
mean any two or more companies or undertakings, or a company and undertaking
interconnected with each other in the following manner, namely:--
(i) if a person who
is the owner or a partner or director of a company or undertaking
or who, directly or indirectly, holds or controls shares carrying
not less than [ten per cent.] of the voting power in such company
or undertaking, is also the owner or partner or director of another
company or undertaking, or directly or directly or indirectly, holds
or controls shares carrying not less than [ten per cent.] or the voting
power in that company or undertaking; or
(ii) if the companies
or undertakings are under common management or control or one is the
subsidiary of another; or
(iii) if the undertaking
is a modaraba managed by the company;
and a person who is
the owner of or a partner or director in a company or undertaking
or, who so holds or controls shares carrying not less than ten per
cent of the voting power in a company or undertaking, shall be deemed
to be an "associated person" of every such other person
and of the person who is the owner of or a partner or director in
such other company or undertaking, or who so holds or controls such
shares in such other company or undertaking:
Provided that shall
be deemed to be owned, held or controlled by a person if they are
owned, held or controlled by that person or by the spouse or minor
children of the person:
Provided further that:
(i) directorship of
a person or persons by virtue of nomination by the Federal Government
or a Provincial Government or a financial institution directly or
indirectly owned or controlled by such Government; or
(ii) shares owned
by the National Investment Trust or the Investment Corporation of
Pakistan or a financial institution directly or indirectly owned or
controlled by the Federal Government or a Provincial Government or
shares registered in the name of a central depository, where such
shares are beneficially owned by the central depository;
shall not be taken
into account for determining the status of a company, undertaking
or person as an associated company, associated undertaking or associated
person;
(3) "Authority"
means the Corporate Law Authority constituted under section 11;
(4) "body
corporate" or "corporation" includes a company
incorporated outside Pakistan, but does not include:-
(i) a corporation
sole; or
(ii) a co-operative
society registered under any law relating to the registration of co-operative
societies; or
(iii) any other body
corporate, not being a company as defined in this Ordinance, which
the Federal Government may, by notification in the official Gazette,
specify in this behalf;
(5) "book
and paper", "book or paper" or "books
of accounts" include accounts, deeds, vouchers, registers,writings
and documents;
(5-A) "central
depository" means a central depository as defined in clause
(cc) of section 2 of the Securities and Exchange Ordinance, 1969 (XVII
of 1969), and registered with the Authority under section 32-A of
that Ordinance;
(6) "chief
executive", in relation to a company means an individual
who, subject to the control and directions of the directors, is entrusted
with the whole, or substantially the whole, of the powers of management
of the affairs of the company, and includes a director or any other
person occupying the position of a chief executive, by whatever name
called, and whether under a contract of service or otherwise;
(7) "company"
means a company formed and registered under this Ordinance or an existing
company;
(8) "company
limited by shares" means a company having the liabilities
of its members limited by the memorandum to the amount, if any, unpaid
on the shares respectively held by them;
(9) "company
limited by guarantee" means a company having the liability
of its members limited by the memorandum to such amount as the members
may respectively thereby undertake to contribute to the assets of
the company in the event of its winding up;
(10) [Omitted];
(11) "the
Court" means the Court having jurisdiction under this Ordinance;
(12) "debenture"
includes debenture stock, bands, [Term Finance Certificate] and
any other securities, other than a share, a company, whether constituting
a charge on the assets of the company or not;
(13) "director"
includes any person occupying the position of a director, by whatever
name called;
(14) "document"
includes summons, notice, requisition, order, other legal process,
voucher and register.
(15) "existing
company" means a company formed and registered under any
previous Company Act;
(15-A) "financial
institution" means an institution not less than fifty per
cent of the share capital of which is held by the Federal Government
or a Provincial Government, whether directly or through a company
or corporation set up or controlled by such Government, and includes
such other institution or companies as the Federal Government may,
by notification in the official Gazette, specify for the purpose;
(16) "financial
year", in relation to any body corporate, means the period
in respect of which any profit and loss account or the income and
expenditure account, as the case may be, of the body corporate, laid
before it in general meeting, is made up, whether that period is a
year or not;
(17) "form"
means a form set out in any of the schedules or prescribed;
(18) "holding
company" means a holding company as defined in section 3;
(19) "listed",
in relation to securities, means securities which have been allowed
to be traded on a stock exchange;
(20) "listed
company" means a company or a body corporate or other body
whose securities are listed;
(21) "member"
means, in relation to a company having share capital, a subscriber
to the memorandum of the company and every person to whom is allotted,
or who becomes the holder of, any share, scrip or other security which
gives him a voting right in the company and whose name is entered
in the register of members, and, in relation to a company not having
a share capital, any person who has agreed to become a member of the
company and whose name is so entered.
(22) "memorandum"
means the memorandum of association of a company as originally framed
or as altered from time to time in pursuance of the provisions of
any previous Companies Act or of this Ordinance.
(23) "modaraba"
and "modaraba company" have the same meaning as in
the Modarabe Companies and Modaraba (Floatation and Control) Ordinance,
1980 (XXXI of 1980);
(24) "officer"
includes any director, chief executive, managing agent, secretary
or other executive of the company, howsoever designated, but, save
in sections 205, 220 to 224, 260, 261, 268, 351, 352, 412, 417, 418,
474 and 482, does not include an auditor;
(25) "participatory
redeemable capital" means such redeemable capital as is entitled
to participate in the profit and loss of a company:
(26) "prescribed"
means,--
(a) as respects the
provisions of this Ordinance relating to the winding up of companies
and other matters requiring to be determined or decided by the Court,
prescribed by rules made by the Supreme Court in consultation with
the High Courts or, where the Supreme Court advises the Federal Government
to do so, by the Federal Government in consultation with the High
Courts; and
(b) as respects the
other provisions of this Ordinance, prescribed by rules or regulations
made by the Federal Government after previous publication in the official
Gazette;
(27) "previous
Companies Act" includes any Act or Acts relating to companies
in force before the Indian Companies Act, 1866 (X of 1866, or the
Acts repealed thereby, the Indian Companies Act, 1866 (X of 1866),
the Indian Companies Act, 1882 (VI of 1882), the Indian Companies
Act, 1913 (VII of 1913), or any law corresponding to any o those Acts
and in force in any of the territories now constituting Pakistan before
the extension of the Companies Act, 1913 (VII of 1913), to such territories;
(28) "private
company" means a company which, by its articles,-
(i) restricts
the right to transfer its shares, if any;
(ii) limits
the number of its members to fifty not including persons who are in
the employment of the company; and
(iii) prohibits any
invitation to the public to subscribe for the shares, if any, or debentures
of the company:
Provided that, where
two or more persons hold one or more shares in a company jointly,
they shall, for the purposes of this definition, be treated as a single
member:
(29) "prospectus"
means any document described or issued as prospectus, and includes
any notice, circular, advertisement, or other communication, inviting
offers from the the public for the subscription or purchase or any
shares in, or debentures of, a body corporate, or inviting deposits
from the public, other than deposits invited by a banking company
or a financial institution approved by the Federal Government, whether
described as prospectus or otherwise;
(30) "public
company" means a company which is not a private company;
(30-A) "redeemable
capital" includes finance obtained on the basis of participation
term certificate (PTC),, musharika certificate, term finance certificate
(TFC), or any other security or obligation not based on interest,
other than an ordinary share of a company, representing an instrument
or a certificate of specified denomination called the face value or
nominal value, evidencing investment of the holder in the capital
of the company on terms and conditions of the agreement for the issue
of such instrument or certificate or such other certificate or instrument
as the Federal Government may be notification in the official Gazette,
specify for the purpose;
(31) "register"
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;
(32) "scheduled
bank" has the same meaning as in the State Bank of Pakistan
Act, 1956 (XXXIII of 1956);
(33) "secretary"
means any individual appointed to perform the secretarial, administrative
or other duties ordinarily performed by the secretary of a company;
(34) "security"
means any share, scrip, debenture, participation term certificate
modaraba certificate, musharika certificate, term finance certificate,
bond, pre-organization certificate or such other instrument as the
Federal Government may, by notification in the official Gazette, specify
for the purpose;
(35) "share"
means share in the share capital of a company;
(36) "special
resolution" which has been passed by a majority of not less
than three-fourths of such members entitled to vote as are present
in person or by proxy at a general meeting of which not less than
twenty-one days" notice specifying the intention to propose the
resolution as a special resolution has been duly given:
Provided that, if
all the members entitled to attend and vote at any such meeting so
agree, a resolution may be proposed and passed a special resolution
at a meeting of which less than twenty-one days notice has been given;
(37) "stock
exchange" means a stock exchange registered under the Securities
and Exchange Ordinance, 1969 (XVII of 1969);
(38) "subsidiary
company" or "subsidiary" means a subsidiary
company as defined in section 3;
(39) "Table
A" means Table A in the First Schedule
(40) [Omitted].
(2) The expression
"commencement of this Ordinance" in any provision
of this Ordinance means the coming into force of that provisions by
virtue of a notification under sub-section (3) of section 1.
3. Meaning
of "subsidiary" and "holding company":-
(1) For purpose of
this ordinance, a company or body corporate shall be deemed to be
subsidiary of another if--
(a) that order company
or body corporate directly or indirectly controls, beneficially owns
or holds more than fifty per cent of its voting securities or otherwise
has power to elect and appoint more than fifty per cent of its directors;
or
(b) the first mentioned
company or body corporate is a subsidiary of any company or body corporate
which is that other's subsidiary:
Provided that, where
a central depository holds more than fifty percent, of the voting
securities of a company, such company shall not be deemed to be a
subsidiary of the central depository save where such voting securities
are held beneficially by the central depository in its own behalf.
(2) For the purpose
of this Ordinance, a company shall be deemed to be another's holding
company if, but only it, that other is its subsidiary.
4. Ordinance
not to apply to certain corporations:-
Nothing in this Ordinance
shall apply to:-
(i) a trading corporation
owned or controlled by a Province and carrying on business only within
that Province; or
(ii) a co-operative
society; or
(iii) a university.
5. Application
of Ordinance to non-trading companies with purely provincial objects:-
The powers conferred
by this Ordinance on the Federal Government or the Authority shall,
in relation to companies which are not trading corporations and the
objects of which are confined to a single Province, be the powers
of the Provincial Government.
6. Ordinance
to override memorandum, articles, etc:-
Save as otherwise
expressly provided herein:-
(a) the provisions
of the Ordinance which come into force by virtue of a notification
under sub-section (3) of section 1 shall have effect notwithstanding
anything contained in the memorandum or articles of a company, or
in any contract or agreement executed by it, or in any resolution
passed by the company in general meeting or by its directors, whether
the same be registered, executed or passed, as the case may be, before
or after the coming into force of the said provisions; and
(b) any provision
contained in the memorandum, articles, agreement or resolution aforesaid
shall, to the extent to which it is repugnant to the aforesaid provisions
of the Ordinance, become or be void, as the case may be.
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