Corporate & Business Law 1

Company Meeting:-
Definition:-
“A company may be defined as a gathering of two or more persons by a
previous notice or by mutual arrangement. For the discussion and transaction of
some business”.
Types:-
(i). Statutory Meeting
(ii).Annual General Meeting
(iii). Extra Ordinary General Meeting.
1.Statutory Meeting:- (Section-157)
Every company limited by shares and every company limited by guarantee and
having a share capital must hold a statutory meetings of the members of the company
within a period of not less then and not more then 6 months, from the date of
entitlement of company to commence business. At least twenty one (21) before
meeting a report called statutory report must be sent to every share holder and there
after forthwith to the registrar.
(i).Statutory Report:-

Statutory shall state.

(a).Total number of shares allotted and consideration for which allotment of shares
was made.
(b).Total amount of cash receipt in respect of shares allotted.
(c).An receipt and payments made there up to a date within seven days of the date of
report.
(d).The names, addresses and occupation of directors, chief executives, secretary,
auditors and legal advisers of company.
(e). Participation of contract needing approval for modification.
(f ). The extend to which underwriting contracts if any have been carried out.
(g) Particulars of any brokage or commission along with the above particulars the report
shall contain a brief account of state of affairs of company since its incorporation.

Future and current business plans and changes in those plans should be put before
members in statutory meetings.
Distinguishing Features Of Statutory Meetings Are As Follows:-

(i).Law relating to statutory meeting is contained section 157 of ordinance 1984.

(ii).This meeting is held only by public company. Public Company need not to held
meeting.
Its is held once in whole life, of company. For this twenty one days notice is essential:
(iii).The business at this meeting is to consider as statutory report.
(iv). this meeting can be convinced only by the directors and members have no power
To call such meeting.
(v).How ever in case of default file petition to court for winding up of company.

University Of Management & Technology

 Corporate & Business Law 2

OBJECTIVE OF STATUTORY MEETING:-

Object of statutory meeting is to give the members an opportunity of learning , at
early stage in companies carrier.
(a).Details of formation of company.
(b).To what extent the financial appeal to the public has been successful.
(c ).What property has been appoint by the company in exchange of its issued
capital.
(d).What has been done with the actual money receipt in payment of shares.
(e). Approve the modification of terms of any contract disclosed in the
prospectus.
(f).To discuss these or any matter arising there in.

2.ANNUAL GENERAL MEETING:-

It means a meeting conviened and held by every company whether public or private or
Guarantee for the first time after incorporation with in eighteen (18) months of such event
and
There after every calendar year through out it’s existence. (Section 158).This section
demands
That there shall be one general meeting in every year and there shall be as many general
Meeting years in existence of company. The annual general meeting is in addition to any.

If default is made holding such meeting in SECP on application of any member of the
Company call or direct recalling of general meetings.SECP in case of a listed company and
Registrar in case of private or other companies may extend the time for holding such meeting.
No extension of time guaranteed to any company in the first meeting. An ordinary meeting is
Meeting which by the ordinance and the article of association of company must be held
Periodically. As a general rule ordinary general meeting are conviened by directors passing a
Resolution at a dully constituted meeting of the board ordering that the necessary notices
Be issued.
Section 158 provide that every company shall hold a general meeting as its
Annual general meetings. Annual general meeting is to be call by the orders of directors and
Not under the instruction of any individual shareholders’ notice convenied this meeting
Is to be given to every member at least twenty on days (21) before meeting.

Distinguishing Features Of Annual General Meetings:-

(I).The law concerning annual general is contained in section 158.

(a). The meeting is to be held by the every company limited by shares whether public or
Private.
(b). Every company limited by guarantee.
(II).First meeting is to be held within 18 months of its incorporation.
(III).The business is to be transacted at this meeting either only ordinary business or both
Ordinary or special business.
(IV).For this 21 days notice is given, this can be conviened by directors, and in case of
default
And every officer is liable to penalty.

University Of Management & Technology

 Corporate & Business Law 3

3.EXTRA ORDINARY GENERAL MEETING:-

It is a meeting which is not an ordinary meeting and not the statutory meeting,
The directors of company having share capital are bound to conduct an extra ordinary general
Meeting on the requisition of holders of not less then one-tenth (1/10) of issued share capital.
If the directors do not with in twenty one days of deposited of requisition at the registered
Office of the company convened the meeting, the requisitions or majority of them in value
May with in three months from the date of deposit of the requisition conviening the meeting
Must be paid by the company. This can retain them out of any remuneration due to directors
Who were in default?

COMPANY RESOLUTION:-

1.Motion Or Proposed Resolution:-

Motion is a proposed resolution, in other words a motion is simply a proposal which
Is placed before the meeting for discussion and decision. After a motion is agreed by the meeting
With or without any change amendment or modification, the final document becomes the resolution
Of the meeting.

2.Resolution:-
Resolution may be defined as “the formal decision o f meeting or any motion or
Proposal before it, there are four kinds of resolution which may be deal by general meeting”.
(i).Ordinary Resolution.
(ii).Extra Ordinary Resolution
(iii).Special Resolution
(iv).Resolution requiring a specified majority or (Class Resolution)

1.Ordinary Resolution:-
A resolution shall be an ordinary resolution when the votes cost, in favor of resolution
By the members present in person or where the proxies are allowed by proxy, exceed the board. If
Any which are cost against the resolution such a resolution is passed by a simple majority of votes of
Members, or by the proxy.

Notice of 21 days must be given for passing a ordinary resolution.

Following Matters May Be Decided By An Ordinary Resolution:-

(i).Declaration of dividends.
(ii).Consideration of annual account.
(iii).Auditors and directors report.
(iv).Appointment of auditors and fixed session of their remuneration.
(v).Election of directors.
(vi).Issue of shares at discount
(vii).Alteration of share capital.

University Of Management & Technology

 Corporate & Business Law 4

2.Extra Ordinary Resolution:-

It is passed at general meeting. It has following contents:
(i).Notice to propose the resolution as an extra ordinary resolution has been given.
(ii).By majority of ¾ th of such members entitle to vote or present or by proxy where proxies are
Allowed.
(iii).The notice must be a twenty one (21) days notice in case of public company.

3.Special Resolution:-
It is also passed at general meeting. It has followed contents.
(i).When not less than 21 days notice has been given.
(ii).When notice specifies the intention to proposed the resolution as a special resolution.
(iii).By a majority of the ¾ th of such members entitle to vote as present in person or by proxy.
(iv). If all the members entitle to attend and vote as any such meeting so agree, a resolution may
Be proposed and passed as a special resolution.
(v).It is required to carry out any of the following:

(a).To change in the name of company.

(b).To changes the registered office from one place to an other.

©.Alteration of Article Of Association.

(d).Reduce the share capital of company.
(e).Make the liability of directors, unlimited.
(f).Initiate a winding up by court.
(g).Winding up a company voluntarily.
(h).Enable a liquidator in members voluntarily up execute some of its powers.
(i). Enable voluntarily liquidators to make compromises with creditors.
(j).Decide how in a voluntary winding up the books and papers of company to be
disposed of .
3.Class Resolution:-
The article some times required that some thing which may be done shall require a
A majority of special characters whether of the whole number of members or of a certain proportion
Of the issued capital or classes of capital.

University Of Management & Technology

 Corporate & Business Law 5

Winding Up Of Company
(1).The winding up to company may be either by the court.
(2).Voluntarily which may be gain
(a).Member’s voluntarily up
(b).Creditors voluntarily winding up.
(3).Subject to supervision of court. These various winding up differ from each other as regards.
(i).The ground for winding up.
(ii).Commencement and effect of winding up.
(iii).Effect on the power of directors.
(iv).Appointment and powers of liquidators.
(v).Dissolution of the company.

Grounds On Which A Court May Order The Winding Up Of Company:-

Section 305 provides that a company from and registered under companies ordinance
May be bound up by a court if
(i).It has by special resolution. Resolution to wound up by court.
(ii).In case of a public company default is made:
(a).Delivering the statutory report to registrar.
(b).In holding statutory meeting
(c ).In holding any two consecutive.
OR It does not
(a).Commence business with in a year of its incorporation.
(b).Suspends business for a whole year.
(iii).The number of members is reduced in case.
(a).A public company below seven(7).
(b).In case of private company below two (2).
(iv).It is unable to pay it’s debts.
(a).It is conceived and involve in lawful or fraudulent business.
(b).Carrying on business that is authorized by MOA conducting it’s business in a
manner that is against the members or person concerned with the formation or
minority shareholders.
(c) .Run and manage by a personal who fails to maintain to profits or commit fraud.

(d).Managed by person who refuses to act in accordance with the MOA or AOA’s or
fails to carry out directions of court.
(e).It ceases to be listed company.
(f).The court is of opinion that it is right that company should be wound up.

PROCEDURE OF WINDING UP:-

To obtain winding up by court a petition must be presented to the high court, where
High court must make an order for winding up.It may direct all the subsequent proceeding to be had in

University Of Management & Technology

 Corporate & Business Law 6

District court and the high court may transfer the proceeding to any district court having jurisdiction to
Wind up of company. A wind up petition may be presented by:

(i).Company (ii).Creditors
(iii).Contributory (iv).Registrar.

A contributory can not present a petition unless:

(a).The membership is reduced below 7 in case of public company and below two in case of private
Company.
(b).His shares were either originally have allotted to him or have held by him and registered in his
Name for at least six (6) months during the eighteen months before the commencement of winding
Up.
Registrar of company is not entitled to present a petition except:

(i).On the ground that from financial condition of company as disclosed in the balance sheet or from
The inspector appointed under section 263.It appears that company is unable to pay its dents.
(ii).Unless previous section of the corporate law commission has been obtained to the presentation
Of petition.
(iii).Share holder alone is entitle to present a petition for winding up on the ground of default for not
Filling statutory meeting, and then only after the expiration of fourteen days.
(iv).After the last day on which meeting ought to have been held. Court may direct instead the company
Be wounded up, give directors for statutory report be submitted or statutory been held.

2.VOLUNTARY WINDING UP: (SECTION-444)

Power to wind up the company voluntarily is a statutory right, which can not be excluded by any
Provision in the articles.
An unregistered company can not winding up voluntarily under the ordinance.
Railway, there are no share holders.
Advantages:-
It has many advantages over the compulsory winding up.
(A).There is no need to accomplish many formalities which are required in case of compulsory
Winding up.

Circumstances Of Voluntarily Winding Up:-

A company may be wound up voluntarily if
(i).When a period if any fixed for its duration by the articles expires.
(ii).When the event if any occurs and on the occurrence of which the article provides that company in
General meeting passes an ordinary resolution, to be wound up voluntarily.
(iii).If company passes a special resolution that the company will wind up voluntarily.

COMMENCEMENT OF VOLUNTARILY WINDING UP:

A voluntarily winding up shall be deemed to commenced in the time of passing of the resolution for
Voluntarily winding up.

There are two kinds of voluntarily winding up

University Of Management & Technology

 Corporate & Business Law 7

(i).Members voluntarily winding up.

(ii).Creditors voluntary winding up.

Petition For Voluntarily Winding Up:-

Where a company is being wound up voluntarily a petition for its winding up may be
Presented by any person authorized to do so.

Note: - In case of voluntarily winding up the members will submit the prove of solvency that they pay
All the debts.

University Of Management & Technology

 Corporate & Business Law 8

Prospectus
After the receive of certificate of incorporation from the registrar of company, the promoters of public
Companies invite the public and financial institutions to subscribe to the capital of the company. This
Notice advertisement, inviting offers for the subscription to the share capital of company is called
As “prospectus”.

Only Public companies can issue prospectus.

Object Of The Prospectus:-

(i).To brings to the notice of public that a new company has been formed.
(ii).To convince those who have saving to invest about the geneunious and its future plans /prospectus.
(iii).To keeps authenticated records of the conditions in which capital has been raised.
(iv).To secure that the directors of company accept the responsibilities for statements in prospectus.

CONTENTS OF PROSPECTUS:-

1. The history and prospectus.

(a).Brief history of company.
2. Main objects of company.
3. Location of plants.
4. Information about the projects, plants, and its machinery, raw material etc.
5. Economic justification and market ability for the goods to be produced.

Capital Structure:-

(a).Share Capital of company.

(i), Authorized Capital if company.
(ii).Issued capital
(iii).Paid up capital
(b).Basis of allotment of shares.
(c) .Facilities availability to non-resident Pakistanis’ for purchase of shares.
(d).Information about the company management.
(e).Details about the projects.

The main information under this heading are the cost of the project means of financing
Of projects, utilities like water supply, water nature of products etc.

(f).Financial Information:

Under heading financial information about the company is provided.

University Of Management & Technology

 Corporate & Business Law 9

a. Auditor’s Report
b. Share holder equity & liability
c. Auditors certificates on share capital.

General Information:-
(a).Appointment of chief executive.
(b).Election of directors.
(c) .Powers of directors.
(d). Voting rights.
(e).Transfer of shares.
(f).Quorum of general meeting.

Comission , Brokage and tax exemption:-

It contain following information.

University Of Management & Technology