THE COMPANIES ORDINANCE

Business laws 1984

PART IV-INCORPORATION OF
COMPANIES AND MATTERS
INCIDENTAL THERETO

Not more than twenty people are entitled to

carry on a business which has an objective
of achieving a gain by the association
partnership, company or individual
members unless its a registered company.
S.14(1)

This section concerning incorporation of

companies excludes any other society or a
association registered/incorporated under any
other Pakistani law. Also does not apply to a
joint family business run by joint family and
certain partnerships such as where practice as
a limited liability company is not permitted and
where total number of families in a partnership
does not exceed twenty. S.14(3)
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Three or more persons involved may form a

public company and one or more person
associated may form a private company;
provided that the objective is lawful and
comply with requirements set out in the
ordinance. S.15(1)

A company once formed satisfying the

requirements set out above, may be
categorized into a company limited by shares
or guarantee or an unlimited company. S.15(2)

MEMORANDUM OF THE FOLLOWING

COMPANIES.
MEMORANDUM OF A COMPANY LIMITED BY SHARES MUST
STATE the word limited as a last word in case of a
public/private company. It must also specify the location
(province or any part of a Pakistan which is not a province)
where the company is situated. The section also requires the
memorandum to spell out the objects of the company and
the territories to which they extend in case of a trading
company; the liabilities of members are limited; the amount
of share the company proposes to get registered. Each
subscriber is entitled to take nothing less than one share and
specifying the number of shares next to his name thereafter.
S.16
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MEMORANDUM OF A COMPANY LIMITED BY

GUARANTEE MUST STATE the word guarantee limited
as last words (guarantee supported by parenthesis).
Other requirements that needs to be stipulated is
similar to that of a company limited by shares i.e. subsection (ii),(iii) & (iv). Further each member is entitled
to take the assets to which he is entitled to. S.17

MEMORANDUM OF A COMPANY LIMITED BY

SHARES MUST STATE the name of a company.
Other requirements are similar to that of the
other two companies stated above. S.18

A company must have a limited number of

directors

Every single member company must have

at least one directors. Every private
company must not have less than two
directors and every public company must
not have less then three directors.S.174

Procedure for elections

The member should have votes which is equal to the

product of the voting shares and the number of directors to
be elected. The candidate who gets the highest number of
votes is elected and the person with next highest vote is so
declared. The cycle continues till the total numbers of the
directors to be elected has been so elected. S.178(5)(c)

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Any person having share capital should not

be allowed to be elected by the members of
the company in the annual general meting.
S.178(5)(a)

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