Company Law

Mercantile Law Smart Outline for Exams

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PARTNERSHIP ACT, 1932

Q# MINOR AS A PARTNER

  1. Introduction
  2. Relevant Provisions
  3. Definition of Minor
  4. Can a Minor Become a Partner?
  5. Pre-Requisites for Minor to be a Partner
  6. Consequences
  7. Rights of Minor as Partner
  8. Duties of Minor as partner
  9. Position of Minor on Attaining Majority
  10. Conclusion

Q# REGISTRATION OF A FIRM

  1. Introduction
  2. Meaning
  3. Definition
  4. Objects of Registration
  5. Procedure of Registration
  6. Advantages of Registration
  7. Effects of Non-Registration
  8. Exceptions
  9. Conclusion

Q# MODES OF DISSOLUTION

  1. Introduction
  2. Relevant Provisions
  3. Meaning of Dissolution
  4. Methods of Dissolution of Marriage
    1. Dissolution by Consent and Agreement
    2. Compulsory Dissolution
    3. Contingent Dissolution
    4. Dissolution by Notice
    5. Dissolution by Court
      • Unsoundness of mind
      • Misconduct
      • Breach of agreement
      • Transfer of interest
      • Permanent incapacity
      • Perpetual loss
  5. Effects of Dissolution
  6. Conclusion

 

 

NEGOTIABLE INSTRUMENTS ACT, 1881

Q# NEGOTIABLE INSTRUMENTS

  1. Introduction
  2. Meaning of Negotiable Instruments
  3. Definition of Negotiable Instruments
  4. Examples of NI
  5. Documents excluded
    • Money orders
    • Postal orders
    • Deposit orders
    • Share certificates
    • Fixed deposits
    • Bill of lading
  6. Parties to NI
    • Drawer
    • Endorser
  7. Characteristics of NI
    • Written
    • Transferable
    • Unconditional
    • Certain amount
    • Payable in money
    • Discharge of debt
    • Transferee can sue
  8. Conclusion

Q# PROMISSORY NOTE

  1. Introduction
  2. Relevant provisions
  3. Meaning of Promissory Note
  4. Definition of Promissory Note
  5. Parties involved in PN
  6. Essentials of Promissory Note
    • Written
    • Unconditional
    • Promise to pay
    • Signature of maker
    • The Maker must be a specific person
    • The Payee must be a particular person
    • The sum payable must be certain
    • Pakistani currency
  7. Conclusion

Q# CHEQUE as NEGOTIABLE INSTRUMENT

  1. Introduction
  2. Meaning of Cheque
  3. Definition of Cheque
  4. Kinds of Cheque
  5. Parties involved in Cheque
  6. Essentials of Cheque
    • Written
    • Unconditional
    • Signature of the Drawer
    • Certain sums of Money
    • Role of Bank
    • Payable on demand
    • Specific person
  7. Conclusion

Q# BILL OF EXCHANGE as NEGOTIABLE INSTRUMENT

  1. Introduction
  2. Meaning
  3. Definition
  4. Parties involved in the Bill of Exchange
  5. Essentials of Bill of Exchange
    • Written
    • Unconditional
    • Signed by Drawer
    • Drawee must be a specific person
    • The payee must be specified
    • Sum Payable must be certain
    • Pakistani currency
  6. Conclusion

Q# DISHONOUR OF CHECK

  1. Introduction
  2. Definition of Banker (Section 3b)
  3. Description of Check (Section 6)
  4. When Bank is Justified
  5. When Bank is Bound
    • Due to insolvency
    • Due to insanity
    • Loss of cheque
    • Unstamped cheque
    • Irregular cheque
    • Torn cheque
    • Defective title
    • Closing of account
    • Countermand of payment
    • Customer’s death
  6. Conclusion

 

 

COMPANIES ACT, 2017

Q# PUBLIC AND PRIVATE COMPANY

  1. Introduction
  2. Relevant Provisions
  3. Meaning of Company
  4. Definition
  5. Kinds of Company
  6. Definition of Private Company
  7. Definition of Public Company
  8. Distinction b/w Public and Private Companies
    • As to the relevant statute
    • As to members
    • As to title
    • As to legal entity
    • As to statutory meeting
    • As to the issuance of a prospectus
    • As to books of accounts
    • As to payment of tax
    • As to the area of ownership
    • As to the number of directors
    • As to the allotment of shares
    • As to the sale of shares
    • As to the transfer of shares
    • As to dissolution
  9. Conclusion

 

Q# PUBLIC LIMITED COMPANY AND PARTNERSHIP

  1. Introduction
  2. Relevant Provisions
  3. Definition of Company
  4. Kinds of Company
    1. As to the Transfer of Shares
      • Public Company
      • Private company
      • Single-member company
    2. As to the Nature of Liability
      • Limited by shares
      • Limited by guarantee
      • Unlimited company
  5. Definition of Partnership
  6. Features of Partnership
    • Persons
    • Agreement
    • Common purpose
    • Unlimited liability
    • Mutual agency
  7. Difference b/w Company and Partnership
    • As to the relevant statute
    • As to legal entity
    • As to members
    • As to the transfer of shares
    • As to capital
    • As to liability
    • As to management
    • As to Audit
    • As to books of accounts
    • As to payment of tax
    • As to the alteration of objects
  8. Conclusion

*Q# REGISTRATION OF A NEW COMPANY

  1. Introduction
  2. Relevant Provisions
  3. Literal Meaning
  4. Definition
  5. Requirements for the Formation of Company
    • Public Company
    • Private company
    • Single-member company
    • Limited by shares
    • Limited by guarantee
    • Unlimited company
  6. Procedure of Formation of Company
    1. Promotion of Company
      • Meaning
      • Preliminary steps
      • Investigation
    2. Filing of Documents
      • Before Incorporation
        • MOA
        • AOA
        • Statutory declaration
      • After Incorporation
        • Consent to become Directors
        • Notice of location of registered office
        • Copy of prospectus
    3. Fee to be paid
  7. Registration of MOA and AOA
  8. Importance of MOA and AOA
  9. Effect of Registration
  10. Advantages of Incorporation
    • Becomes legal entity
    • Can Sue & To be Sued
    • Can own its assets
    • Have Rights and Duties
    • Can raise funds
    • Can sell its Securities
    • Can enter into agreements
    • Considered as person
    • Can claim set-off
  11. Disadvantages of Incorporation
    • OPPOSITE TO ALL ABOVE ADVANTAGES
  12. Conclusion

Q# MEMORANDUM OF ASSOCIATION

  1. Introduction
  2. Relevant Provisions
  3. Literal Meaning
  4. Definition of MOA
  5. Importance and Purpose of MOA
  6. Types of MOA
    • MOA of the company; Limited by Shares
    • MOA of the company; Limited by Guarantee
  7. The place for filing MOA
  8. Printed Form of MOA
    • Printed
    • Paragraphs
    • Signed by each subscriber
    • Date Mentioned
  9. Alteration in MOA
    • Procedure
    • Powers of commission
    • Discretion of commission
    • Effects of Alteration in MOA
  10. Clauses of MOA
    1. Name clause
    2. Situation clause
    3. Object clause
    4. Liability clause
    5. Capital clause
    6. Subscription clause
  11. Conclusion

Q# ARTICLES OF ASSOCIATION

  1. Introduction
  2. Relevant Provisions
  3. Literal Meaning
  4. Definition of AOA (Section 2(3))
  5. Contents of AOA
  6. Registration
  7. Printed Form of AOA
    • Printed
    • Paragraphs
    • Signed by each subscriber
    • Date Mentioned
  8. Alteration in AOA
    • Procedure
    • Powers of Company
    • Copy of memorandum to be given to every member
    • Alteration to be noted in every copy
    • Legal Effects of Alteration
  9. Limitations
    1. Change is not possible by general resolution
    2. Fraud cannot be constituted
    3. Cannot conflict with MOA
    4. Alteration must be bonafide
    5. Not to contain illegal things
    6. Not to commit a Breach of contract
    7. Not against the provisions of the Companies Act
  10. Articles not to be made unalterable
  11. Conclusion

Q# PROSPECTUS

  1. Introduction
  2. Relevant provisions
  3. Meanings of prospectus
  4. Definitions (Section 2(29))
  5. Objects of Prospectus
    • To announce to the public
    • To keep record
    • To ensure the responsibility of directors
  6. Features of a Prospectus
    • Invitation to public
    • Invitation to subscribe
    • Invitation on behalf of the company
  7. Power to Issue Prospectus
  8. Contents of Prospectus
    • Brief history
    • Share capital
    • Brokerage and tax exemptions
    • Financial information
    • General information
    • Board of directors
    • Interest of directors
    • Application for shares
    • Allotment of shares
    • Information about promotors
    • Miscellaneous
  9. Issuance of Prospectus
  10. Penalty in case of any Contravention
  11. Conclusion

Q# TRANSFER OF SHARES

  1. Introduction
  2. Relevant Provisions
  3. Meanings of Shares
  4. Definition of Shares
  5. Nature of Shares
    • Transferable
    • Moveable
    • Non Refundable
  6. Determination of the value of shares
  7. Allotment of Shares
  8. Transfer of Shares
    • Application by transferor
    • Application by transferee
    • References
    • Register of transfer of shares
    • Registering as a shareholder
    • In case of offence: Level 2 penalty
  9. Board not to Refuse
  10. Restrictions on Transfer of Shares
  11. Notice of Refusal
  12. Transfer to Successor in Interest
  13. Transfer to Nominee of a Deceased Member
  14. Appeal against Refusal
  15. Conclusion

Q# REDUCTION IN SHARE CAPITAL

  1. Introduction
  2. Relevant Provisions
  3. Literal Meaning
  4. Definition
  5. Kinds of Share Capital
    • Authorized capital
    • Issued capital
    • Un-Issued capital
    • Paid-Up capital
    • Called capital
    • Un-Called Up Capital
    • Reserve Capital
  6. Reduction in Share Capital
    • Cancel any paid-up share capital
    • Pay off any paid-up share capital
  7. Conditions for Reduction
    • Provisions in Articles
    • Special Resolution
    • Confirmation
  8. Objection by Creditors
  9. Power to Dispense with Consent of Creditors
  10. Order of Reduction
  11. Registration of Order of Reduction
  12. Publication of Reasons for Reduction
  13. Liability of Members
  14. Penalty on Concealment of Name of Creditors
  15. Conclusion

*Q# Director of a Company

  1. Introduction
  2. Relevant Provisions
  3. Definition of Director
  4. Number of Directors
  5. Procedure for Election of Directors
  6. Term of office of Director
  7. Removal of Director
  8. Validity of Acts of Directors
  9. Appointment of Directors
  10. Qualification of Director
  11. Disqualification of Director
  12. Powers of Directors
  13. Duties of Directors
  14. Liabilities of Directors
  15. Term of Office of Director
  16. Remuneration of Director
  17. .
  18. Vacation of Office of Director
  19. Vacation of Office by the Directors
  20. Conclusion

Q# PROMOTERS OF COMPANY

  1. Introduction
  2. Relevant Provisions
  3. Literal Meaning
  4. Definition
  5. Professionals are not Promoters
  6. Stages of Formation of Company
    1. Promotion Stage
    2. Incorporation stage
    3. Raising of share capital
    4. Business
  7. Who may be called Promoters
    • who prepare prospectus
    • who gives instructions for MOA
    • who gives instructions for AOA
    • who take necessary steps to accomplish the business
    • who negotiate underwriting contracts
    • who make arrangements for the directors
  8. Types of Promoters
    1. Professional
    2. Occasional
    3. Self-Promoters
  9. Functions of Promoters
    • Investigation
    • Finding out persons
    • Selection of Bank, Auditors, Legal advisors, underwriters
    • Preparation of documents
    • Submission of documents
    • Payment of expenses
  10. Liability of Promoter
    1. To disclose
    2. Liability for secret profit
  11. Remuneration of Promoters
  12. Modes of Payment
  13. Remedies for Breach of Duty
  14. Conclusion

Q# AUDITORS OF COMPANY

  1. Introduction
  2. Relevant Provisions
  3. Meaning
  4. Definition
  5. Importance
  6. Appointment of Auditors
    • By Board
    • By Company in AGM
    • Consent to be an Auditor
  7. Remuneration of the Auditors
  8. Intimation to the Registrar
  9. Qualification for the Appointment of Auditor
    1. For public company
    2. For private company
    3. For any other company
    4. For partnership firm
  10. Disqualifications for Auditor
    • Appointment in a private company that is itself a subsidiary
    • Who is holding any office in the company
    • Who is a partner
    • Spouse of the director of the company
    • Who is indebted to the company
    • Who is a minor
    • Who is convicted by a court
    • Who is in a business relationship
    • Who is not eligible
    • Who is not qualified
    • Who is under penalty
  11. Removal through a Special Resolution
  12. Filing of Casual Vacancy
  13. Rights of Auditors
    1. Right to access
    2. Right to information
    3. He can refuse without justification
  14. Duties of Auditor
    • To conduct the audit and prepare a report
    • To carry out the examination
    • To make reports to members
    • To express an opinion
    • To attend any general meeting
  15. Conclusion

Q# STATUTORY MEETING

  1. Introduction
  2. Relevant Provisions (Section 131)
  3. Meaning
  4. Definition
  5. Notice of Statutory Meeting (before 21 days)
  6. Contents of Notice
    • Declaration
    • Date
    • Time
    • Place
  7. Objects of Statutory Meeting
    • Details of the formation of the company
    • The success of financial appeal
    • Property of the company
    • Actual amount received by payment of shares
    • Progress of the company
    • Permission of shareholders to modify the contract
  8. Business of the Meeting
    • Discuss the statutory report
    • Win the confidence of shareholders
    • Latest information to the shareholders
  9. Statutory Report
    1. Number of shares allotted
    2. Cash received
    3. Summary of receipts
    4. Particulars of Commission
    5. Particulars of Directors, Chief Executives, Secretaries, Auditors, and Legal advisors
    6. Particulars of any contract
    7. Underwriting contracts
    8. Affairs of the company
    9. Shares allotted by the company
    10. Contents submitted to the Registrar
    11. Formation of a list
  10. Liberty to discuss any matter
  11. Conclusion

*Q# MEETINGS OF THE COMPANY

  1. Introduction
  2. Relevant Provisions
  3. Kinds of Meetings
    1. Statutory Meeting
    2. Annual General Meeting
    3. Extra-Ordinary General Meeting
  4. Meetings and Votes
  5. Conclusion

Q# RESOLUTIONS OF COMPANY

  1. Introduction
  2. Relevant Provisions
  3. Literal Meaning
  4. Definition
  5. Parts of Resolution
    • First Part: cause of resolution
    • Second Part: decided the matter of resolution
  6. Kinds of Resolution
    1. Ordinary Resolution
      • Notice: 14 days
      • Purposes:
        1. Managing agent
        2. Dividend
        3. Directors
        4. Remuneration
        5. Auditors
        6. Shares at discount
    2. Special Resolution
      • Notice: 21 days
      • Purposes:
        1. To change the name
        2. To transfer the registered office
        3. To change the articles
        4. To change the memorandum
        5. To fix the remuneration
        6. To organize the share capital
        7. To investigate the affairs
        8. To remove the managing agent
        9. To convert private co. into public co.
      • Condition: Certified copies (within 15 days)
    3. Extra-Ordinary Resolution
      1. Notice: 14 days
      2. Purposes:
        • To remove director
        • Appointment of new director
        • Winding up
        • Settlement b/w Co. and directors
      3. Condition: Send the copy
  7. Notice of Resolution
  8. Passing of Resolution at Adjourned Meeting
  9. Passing of Resolution through Circulation
    • Circulation of resolution
    • Validity of resolution
    • Attachment of necessary papers
    • Agreement to resolution is not revokable
    • Resolution to be a part of the Minutes of the meeting
  10. Filing of Resolution
  11. Records of Resolutions and Meetings
    • Physical form: 21 years
    • Electronic form: Permanently
  12. Inspection of Records
  13. Conclusion

Q# COMPULSORY WINDING UP

  1. Introduction
  2. Relevant Provisions
  3. Meaning
  4. Definition
  5. Modes of Winding Up
    • By Court (Compulsory)
    • Voluntary
    • Subject to the supervision of court
  6. Compulsory Winding Up
  7. Grounds for Winding Up
    1. By Special resolution
    2. Failure to submit a statutory report
    3. Failure to hold the meeting
    4. Failure to file a financial statement
    5. Failure to pay debt
    6. Failure to maintain accounts
    7. Failure to act
    8. Members below the required number
    9. No member is left behind
    10. Oppressive toward minority members
    11. The listed company becomes unlisted
    12. Does not commence business
    13. Commence prohibited businesses
    14. Unlawful activities
    15. Revocation of license
  8. Who may file a Petition
    • Company
    • Creditors
    • Contributors
    • Afforsaid party
    • Registrar
    • Commission
    • Person Authorized
  9. Right to file Petition for Winding Up
  10. Commencement of Winding Up
  11. Powers of Court on Hearing Petition
    1. Dismiss the petition
    2. Interim order
    3. Provisional manager
    4. Order of winding up
    5. Refuse to make an order
  12. Copy of Winding Up Order
  13. Effect of Winding Up
  14. Power of Court to Stay Winding Up
  15. Conclusion

Q# VOLUNTARY WINDING UP

  1. Introduction
  2. Relevant Provisions
  3. Meaning
  4. Definition
  5. Modes of Winding Up
    • By Court (Compulsory)
    • Voluntary
    • Subject to the supervision of court
  6. Circumstances for Winding Up
  7. Commencement
  8. Effect of Voluntary Winding Up
  9. Notice of Resolution
  10. Declaration of Solvency
  11. Appointment of Liquidator
  12. Notice by Liquidator
  13. Power of Liquidator to Accept Shares
  14. Duty of Liquidator where the Company turns out to be Insolvent
  15. Duty of Liquidator to call General Meetings
  16. Final meeting and Dissolution
  17. Conclusion
  18. .
  19. Winding Up under Supervision of Court
  20. Winding Up of Unregistered Companies

*Q# THE COMMISSION AND BOARD

  1. Introduction
  2. Relevant provisions
  3. Establishment of the Commission
  4. Head Office
  5. The Commissioners
  6. The Chairman
  7. Term of office of the Commissioners
  8. Appointment of employees of the Commission
  9. Appointment of Advisors and Consultants
  10. Commission’s Functions or Power
  11. Securities and Exchange Policy Board
  12. Procedure of the Board
  13. Committees of the Board
  14. Disqualifications of Members and Commissioners
  15. Conclusion

*Q# FOREIGN COMPANY

  1. Introduction
  2. Relevant Provisions
  3. Literal Meaning
  4. Documents to be Submitted by Foreign Companies
  5. Return to be delivered to Registrar
  6. Accounts of Foreign Companies
  7. Certain Obligations of Foreign Companies
  8. Power of the Commission to receive information
  9. Service on Foreign Company
  10. Failure of the Company
  11. Intimation of ceasing to be given
  12. Penalties
  13. Conclusion

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