4. No company to operate without registration.- No Modaraba company shall operate without registration with the Registrar.

5. Eligibility for registration.- A company shall be eligible for registration as a Modaraba company if it fulfills the following condition, namely :-

(a) that it is registered under the Companies Act, 1913 (VII of 1913), or is body corporate formed under any law in force and owned or controlled, whether directly or through a company or corporation, by the Federal Government or a Provincial Government;

(b) that, being a company solely engaged in the floatation and management of Modaraba, it has a paid-up capital of not less than two and a half million rupees;

(c) that none of its directors, officers or employees has been convicted of fraud or breach of trust or of an offence involving moral turpitude;

(d) that none of its directors, officers or employees has been adjudged an insolvent or has suspended payment or has compounded with his creditors;

(e) that its promotions are, in the opinion of the Registrar, persons of means and integrity and have knowledge of matters which the company may have to deal with as modaraba company; and

(f) that being a company also engaged in business other than floatation and management of modaraba, it has paid up capital of such amount and of such nature as may be prescribed.

6. Application for registration.- (1) A company which is eligible for registration as a modaraba company may make an application for registration to the Registrar in such form and with such documents as may be prescribed.

(2) The Registrar, if he is satisfied after such enquiry and after obtaining such further information as he may consider necessary that the applicant is eligible for registration and that it is in the public interest so to do, may grant registration to such company on such conditions as he may deem fit.

(3) In particular and without prejudice to the generality of the powers conferred by sub-section (2), such conditions may include:-
(i) investments to be made:
(ii) information and returns to be furnished to the Registrar:
(iii) business to be undertaken; and
(iv) restriction on transfer of shares by promoters, sponsors or persons holding controlling interest.