Company
A company is legally and entitled apart from its members, capable of rights and duties of its own, and endowed with the potential of the perpetual subsection.
in other words, a company means certain persons registered under the Companies Ordinance 1984.
Classification of Companies
Statutory companies:
The companies which are incorporated by a special act of Legislative or under an ordinance are named statutory companies, such as State Bank of Pakistan, Wapda, and Sui Gas.
Registered Companies
A company that is formed and registered under the Companies Ordinance 1984 is known as a registered company, the companies Ordinance provides registration of the following four types of companies.
- Company limited by shares
- Company limited by guarantee
- An unlimited company
- Association not for profit
Company Limited by Shares
A Company limited by shares is the most important and popular among registered companies, it is a company that keeps the liability responsibility of its members Limited unto the value of the shares purchased by them.
Private Limited Company
It is an Association of at least 2 members but the maximum number of them cannot exceed 50. it restricts the members to transfer their shares in the company. it also prohibits any invitation to the public to subscribe to its shares.
A company is the combination of the directors while the company among them stands as an artificial person. it is necessary to write the memorandum of association and article of association. in case of Loss personal properties of the directors can’t be sold.
Memorandum of the Association
The memorandum of association is the most important document. it defines the constitution of the company. it contains the fundamental conditions upon which the company is registered. it is a Foundation upon which a company structure is based. it is a charter of the company, A company can work only for the particular objects which are mentioned in the memorandum of association. A company cannot change the memorandum of association without the permission of the court. it should be printed on simple paper but not on stamp paper and signed by all directors in the presence of a witness.
It should be registered with the registrar’s office in Lahore. The registrar’s office issues the certificate of incorporation after registration of the memorandum of association.
Article of the Association
It is a document in which rules and regulations are written to run the company for governing the internal administration. The article of the association is farmed in such a manner to support the memorandum of association.
Public Limited Company
According to the act 1984 company Ordinance, at least 7 members can start a public limited company, but there is no limit to the maximum number of members. A company can sell the shares to the public. the share can be easily transferred to any other person. The share selling means to Barrow capital from the public. A person who buys the share is called a shareholder while the owners of the company are called directors. The responsibility of shareholders is limited up to the value of the share only. A public limited company has to receive the certificate of commencement before starting the business.
For commencement of the business, it is necessary to write the Memorandum of Association and Article of Association.
Public limited Corporation also issued the prospects in which the company invites the public to purchase the shares.
A company can work only for the particular object which are mentioned in the Memorandum of Association. A company cannot change the Memorandum of Association without the permission of the Court. it should be printed on simple paper but not on stamp paper and signed by all directors in the presence of a witness.
it should be registered with the registration office in Lahore. the registrar’s office issues the certificate called the certificate of incorporation after registration of the Memorandum of Association.
Management and Direction of a Company
The shareholders in the Annual meeting elect the directors who manage the company according to the policy approved by them. The board of directors thus is the top organ of the company. The boards of directors usually form an executive committee.
The chief executive of the committee assisted by the head of various departments like the Production Manager, Sales Manager, and Chief Accountant. The personnel Manager manages the company and implements the decisions of the board.
Directors of a Company
The shareholders and owners of a public company elect directors in the Annual General Meeting of the company.
A private limited company must have at least two directors, whereas a public limited company must have at least seven directors.
A director shall hold office for three years unless he resigns earlier or becomes disqualified.
The directors in the meeting elect a managing director who holds office for a period determined by the board.
Thanks for your blog, nice to read. Do not stop.
yes I’m working on it to complete, Thanks for reading.