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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 fifth 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.-- 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) "articles" means the articles of association of a company as originally
flamed 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 comp-any, 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 an 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 under-taking, is
also the owner or partner or director of another company or under-taking or directly or
indirectly, holds or controls shares carrying not less than Twenty per cent. of 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 shares 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:
TABLE
| Section(s) | Date of coming into force |
| (1) | (2) |
| 203 | First day of May 1985 |
| 297 to 437 and 443 to 449 | First day of July, 1985 |
| 41 and 226 | First day of January, 1986. |
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--
(a) a corporation sole; or
(b) a co-operative society registered under any law relating to the registration
of co-operative societies: or
(c) 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;
(5A) Central depository means a
central depository as defined in clause (cc) of section 2 of the Securities
and Exchanger Ordinance, 1969 (XVII of 1969), and registered with the Authority
under Section 32A of that Ordinance.
(6) "chief executive" in relation to a company means an individual
who, subject to the control and directions of the director, 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;
"(6A) "Commission" means the Securities and Exchange Commission
of Pakistan established under section 3 of the Securities and Exchange Commission
of Pakistan Act, 1997 (XLII of 1997);" and
(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 liability
of its member 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, bonds, term Finance Certificate and any other securities, other
than a share, of 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;
"(15A) "financial institution" includes,–
(a) a company or an institution whether established under any special
enactment and operating within or outside Pakistan which transacts the
business of banking or any associated or ancillary business through its
branches;
(b) a modaraba, leasing company, investment bank, venture capital company,
financing company, housing finance company, a non-banking finance company;
and
(c) such other institution or companies authorised by law to undertake any
similar business, 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 sub-scriber 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 Modaraba 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 of 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 parsons who
(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 parsons hold one or more shares in a company
jointly, the shall, for the purposes of this definition, be treated as 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 public for the subscription or purchase of any shares in, or
debenture of, a body corporate, or inviting deposits from the pubic, 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 certificates, 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 by notification in the official Gazette, specify
for the purpose;
(31) "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;
(32) "schedule bank" has the same meaning as in the State Bank of
Pakistan Act, 1956 (XXXIII of]956);
(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 certificates
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" means a resolution which has
been passed by 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 as 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 provision by virtue of
a notification under subsection (3) of section 1.
3. Meaning of "subsidiary" and "holding company"--
(1) For purposes of this Ordinance, a company or body corporate shall be deemed
to be a subsidiary of another if
(a) that other company or body corporate directly or indirectly controls, beneficially
owns or holds more than fifty per cant 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 :
Provide that, where a central depository
holds more that fifty per cent of the voting securities of a company shall not
be deemed to be 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 if, that other is its subsidiary.
4. Ordinance not to apply to certain corporation.- 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 powers of Provincial Government.
6. Ordinance to override memorandum, articles, etc.--
Save as otherwise expressly provided herein,-
(a) the provisions of this Ordinance which come into force by virtue of a notification
under subsection (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 this Ordinance, become or be void, as the case may be.
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