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Answer No.

1
Acceptance must be communicated
A simplify definition of a contract can be a legally binding
agreement between two parties. Basically, Contract Act 1950 was
governing the contractual transactions in Malaysia. If there are some
cases which the law of contract unable to dealt with sufficiently, the
English law can be applied. There are lots of contract is being
offered, accepted or even rejected daily around the globe. All these
contracts are made orally or in the written form. As the examples for
orally made contract such as buying coffee at a shop, buying a reload
coupon for mobile phone. Whereas contracts in written form such as
buying a house or a contract of buying a car.

Definition of Contract

Contract is a written or spoken agreement between two or more
parties, intended to be enforceable by law. Contracts are essential to
commercial life. In order that the business community may regard
contracts with a high degree of confidence, it is important ensure
that the contracts are well regulated, and certain in form and effect.

Definition of Contract Act 1950

Generally, in Malaysia, the Contract Act 1950 regulates the law of
contracts. In section 2(h) of the Contracts Act 1950 (CA), contract is
an agreement enforced by law. It makes a contract legalized. If a
particular subject, concerning the law of contract is not dealt
sufficiently or not at all by the Contract Act or Malaysian decided
cases, may the English law be applied.

A contract is formed when two parties with the correct mental
intent, under the correct circumstances, within the boundaries of
the law, and with some detriment to each of them agree to do
certain acts in exchange for the others acts. This formation requires
the presence of all these elements; the lack of one elements or
presence of a problem, such as illegality, can invalidate the contract.

There essential elements or pre-requisites of a valid contract are
offer, acceptance, consideration, intention to create legal relations,
certainty and capacity.

Offer

The offer is the first part of a contract. The person who makes the
offer is called the offeror, and the person to whom the offer is makes
is called the offeror. Offer is a proposal offered by the offeror and
offeree. In section 2(a) when one person signifies to another his
willingness to do or to abstain from doing anything, with a view to
obtaining the assent of that other to the act or its abstinence, he is
said to make a proposal. Therefore, a proposal or offer is something,
which is capable of being converted into an agreement by its
acceptance.

An offeror is people who are propose a contract or a person who
make a contract while an offeree is a person who accepts the
proposal made by offeror. The offer example is when A offers his
Ferrari to B for the price of RM300,000. B is accepts to offer by
buying the car from A. Therefore, A is the offeror and B is the
offeree.

There are 2 types of offer; bilateral offer and unilateral offer.
Bilateral offer is an offer made to a specific person or group of
persons. On the other hand, unilateral offer is not made to any
specific person rather it is made to the world at large.

There are five types of unilateral offer that are display of goods in
shop, advertisement in the newspaper, auction sale, tenders and
offer made to the world at large.

Auction sale is the auctioneer call for bids is only an invitation to
threat. When there are someone calls his bid, he is considering
making an offer and the auctioneer is free to accept or reject the bid.
Besides, tender is means that when the tenders are invited from the
public for the highest price or the lowest price for the tendered
items or services to having the required items or services. All this
are regarded as mere invitation to treat.

The example of unilateral offer is Carlill v The Carbolic Smoke Ball
Company [1893] 1 QB 525. The fact is the Carbolic Smoke Ball
Company has made a product called smoke ball which claimed that
it could protect the person from getting influenza. The company also
advertised that they will offer 100 to anyone who still succumbed
to influenza after using the products in a fixed period. Furthermore,
the company also already deposited 1000 to the bank to show their
genuine intention in the matter. The plaintiff; Mrs Carlill has bought
the smoke ball and used it for a fixed period but she still contracted
suffer from this influenza. While she asked for the reward the
Carbolic Company claimed that there was no enforceable contract.
Conclusion, the Court of Appeal that the plaintiff was gets the 100
as she had accepted the offer made to the world at large.

Acceptance

There are a few principles and rules of acceptance. According to S4
(1) CA 1950, the communication of proposal is complete when it
comes to the knowledge of the person to whom it is made (offeree).
Besides, communication of acceptance is complete when it is
communicated to the offeror.

As the topic we are discussing, acceptance must be communicated to
the proposer in order to make a contract valid. There are several
rules dealing with the communication of acceptance that are the
acceptance must be communicated. It was depending on the
construction of the contract, the acceptance may not have to come
until the announcement of the performance of the conditions in the
offer but nevertheless the acceptance must be communicated.

Besides, the offeree who is the person to whom the offer is made can
only accept an offer. Furthermore, an offeree is not limit if another
person accepts the offer on his behalf without his approval.
Moreover, if the offer specifies a manner of acceptance such as by
post or fax, then we must accept it using a manner that is no less
effective than the manner specified but it is an exception to the
postal rule. Finally, silent is not considered as an acceptance.
However, there is an exception for postal rule. In the case of
Felthouse v Bindley, A make an offer to sell his house to B but B did
not communicate to A to buy his house. Finally, B was bought the
house under the pressure that given. It was held that silent cannot
be implied as acceptance.

The definition of acceptance is looking at a situation an offeree
agreed to the offer made by the offeror. In section 2(b) when the
person to whom the proposal is made signifies his assent thereto,
the proposal is said to be accepted: a proposal, when accepted,
becomes a promise. According to section 2(c), the person who
making proposal is called the promisor and the person accepting the
proposal is called the promise. The promisor is also known as a
proposer or an offeror. A promisee is also referred to as an
acceptor or offeree.

An acceptance must be differentiating with a counter offer. If the
offeree denies and refuses the offer or changes the terms of the
offer, the offer has been broken and cannot be accepted at a future
time. In the case of Hyde v Wrench, the defendant offer to sell an
estate to the plaintiff at a certain price. However, the plaintiff made
an offer to buy at a lower price. This offer was refused.
Subsequently, the plaintiff was willing to accept the initial offer. It
was held that no contract was made as the initial offer did not exist
at the time the plaintiff tried to accept it. Therefore, the offer has
been terminated by the counter offer.

There are a few conditions of acceptance. Firstly, the acceptance
must be absolute and unqualified. In section 7(a) in order to convert
a proposal into a promise the acceptance must be absolute and
unqualified. According to Oxford Advanced Learners Dictionary,
absolute means definite and without any doubt or confusion, while
unqualified means having the right knowledge.

Secondly, the communication of proposal is very important part. Of
course, an offer or a proposal needs to be communicated to the
intended promisee. In section 4(1), the communication of proposal
is completed when it comes to the knowledge of the person to whom
it is made. Similarly, the acceptance by the promisee needs to be
communicated to the promisor. This is important because, the
promisor can always revoke his or her offer before there is an
acceptance, but no after.

Lastly, communication of acceptance is the last part of the offer and
acceptance. In section 4(2), the communication of acceptance is
complete; as against the proposer, when it is put in a course of
transmission to him, so as to be out of the power of acceptor; as
against the acceptor, when it comes to the knowledge of the
proposer So, for the promisor proposer, his offer is deemed to be
accepted the moment the promise has transmitted the acceptance to
the promisor and there is no possibility for him to retract it, even
before the promisor has received it or comes to know about it.
However, for the promisee or acceptor, the acceptance is considered
to be communication to the promisor only when the promisor has
received it to come to know about it. An offeror cannot stipulate in
the offer that silence or no communication will deem to be
acceptance.

Communication of acceptance

I agree with the statement of A contract is not made until
acceptance is actually communicated to the proposer.

Acceptance, whether by the words or conduct, is not effective until it
is actually communicated to the offeror by the offeree or his
authorized agent. The main reason for this rule is to protect the
offeror who could otherwise find himself in the unenviable position
of being bound to a contract without his knowing that his offer had
been accepted.

An exception to this general rule is the acceptance, which sent by
post. This exception is commonly known as the postal rule. The
postal rule states that an acceptance by post takes effect when the
acceptance is posted and not when the acceptance is actually
received. The effect of this rule is that the acceptance is valid before
it is actually communicated to the offeror. This is true even where
the letter never reaches its destination.

However, the postal rule cannot be applied in all cases where the
acceptance is by post. It can only apply where it is specified that
acceptance may be by way of post or where it is reasonable to post
the acceptance, such as where the offer itself was sent by post. Of
course, where the terms of the offer itself exclude the postal rule, it
will not be applicable. For instance, the terms of the contract may
say expressly that the acceptance is effective only when received by
or communicated to the offeror. If this is the case, then there is
obviously no scope for the application of the postal rule. It should
also be noted that the postal rule applies only to letters, which have
been properly stamped and addressed.

The postal rule also does not apply where the acceptance is made by
way of instantaneous communication, such as during a face- to-face
conversation or a telephone conversation. However, with the advent
of new modes of communication, for example facsimile, voice-mail
or electronic mail messages, which are neither as delayed as post
nor as instantaneous as an actual conversation, the precise scope of
the postal rules application becomes more uncertain. The
application of this rule can be crucial where disputes arise as to
whether there has been valid acceptance in the event. The
acceptance is transmitted but not necessary must be received by or
communicated to the offeror.

The law in relation to this issue is still uncertain. There have been
suggestions, however, that the answer should depend on each
particular set of facts and whether it was possible in each case for
the sender of the acceptance to be aware of the fact that the
communication of acceptance had not been successful. Where it is
possible for the sender to defect non-communication, the burden is
on the sender to re-transmit the message and the postal rule would
not apply. On the other hand, where detection is not possible, then
the postal rule would apply to render the acceptance effective upon
transmission. This reasoning would apply as well to voice-mail or
electronic mail messages which are garbled or which go astray.

It is importance to realize that the postal rule only applies to the
communication of acceptance. It does not apply to communication of
an offer or the communication of a revocation of an offer or to the
communication of a revocation of an acceptance.

Difference Between An Offer & An Invitation To Treat
An invitation to treat is not an offer but an invitation to bid or
bargain for an item. For example, at an auction persons may bid on
various items presented. An invitation to treat also occurs also
when goods are advertised for sale in the media or in shop windows.
Goods in a shop window or goods advertised are not an offer by the
owners of the goods but are technically an invitation for interested
persons to make an offer.

Conditions Under Which Offer And Acceptance Are Communicated
An offer must be very clearly made. An offer can be made to one
person, a group or to the whole world. For example, offering a
reward for a lost wallet is an offer to anyone finding the wallet. In
cases where there is a counter-offer the original offer is no longer
valid. A counter offer is an implied rejection of the original offer.
Foe example: John offers to sell Paula a laptop for $10,000. Paula
subsequently offers him $8000.00 as she thought $10,000 was too
expensive. Paula has rejected Johns original offer and has made a
counter-offer of $8,000.
Acceptance must also be clear. In the case of a counter offer a clear
acceptance to the new offer must be identified.
Contracts may be made orally, in writing or they may be implied.

Oral Contracts
Are based on what the parties said. For example, asking someone to
wash your car for payment
Written Contracts
Both offerer and offeree must sign the contract document
Implied Contracts
Implied Contracts are made by the observed actions of the parties
involved. For example, someone who sits at a table in a restaurant
and places an order has implied that he will pay for the food that
will be served.

Answer No. 2
Partnership
An association of two or more persons engaged in a business
enterprise in which the profits and losses are shared
proportionally. The legal definition of a partnership is
generally stated as "an association of two or more persons to
carry on as co-owners a business for profit" (Revised Uniform
Partnership Act 101 [1994]).Early English mercantile courts
recognized a business form known as the societas. The societas
provided for an accounting between its business partners, an agency
relationship between partners in which individual partners could
legally bind the partnership, and individual partner liability for the
partnership's debts and obligations. As the regular English courts
gradually recognized the societas, the business form eventually
developed into the common-law partnership. England enacted its
Partner-ship Act in 1890, and legal experts in the United States
drafted a Uniform Partnership Act (UPA) in 1914. Every state has
adopted some form of the UPA as its partnership statute; some
states, however, have made revisions to the UPA or have adopted
the Revised Uniform Partnership Act (RUPA), which legal scholars
issued in 1994.

The authors of the initial UPA debated whether in theory a
partnership should be treated as an aggregate of individual partners
or as a corporate-like entity separate from its partners. The UPA
generally opted for the aggregate theory in which individual
partners ("an association") comprised the partnership. Under an
aggregate theory, partners are co-owners of the business; the
partnership is not a distinct legal entity. This led to the creation of a
new property interest known as a "tenancy in partnership," a legal
construct by which each partner co-owned partnership property. An
aggregate approach nevertheless led to confusion as to whether a
partnership could be sued or whether it could sue on its own behalf.
Some courts took a technical approach to the aggregate theory and
did not allow a partnership to sue on its own behalf. In addition,
some courts would not allow a suit to go forward against a
partnership unless the claimant named each partner in the
complaint or added each partner as an "indispensable party."

The RUPA generally adopted the entity approach, which treats the
partnership as a separate legal entity that may own property and
sue on its own behalf. The RUPA nevertheless treats the partnership
in some instances as an aggregate of co-owners; for example, it
retains the joint liability of partners for partnership obligations. As a
practical matter, therefore, the present-day partnership has both
aggregate and entity attributes. The partnership, for instance, is
considered an association of co-owners for tax purposes, and each
co-owner is taxed on his or her proportional share of the
partnership profits.


Relationship of Partners to Each Other

Each partner has a right to share in the profits of the partnership.
Unless the partnership agreement states otherwise, partners share
profits equally. Moreover, partners must contribute equally to
partnership losses unless a partnership agreement provides for
another arrangement. In some jurisdictions a partner is entitled to
the return of her or his capital contributions. In jurisdictions that
have adopted the RUPA, however, the partner is not entitled to such
a return.

In addition to sharing in the profits, each partner also has a right to
participate equally in the management of the partnership. In many
partnerships a majority vote resolves disputes relating to
management of the partnership. Nevertheless, some decisions, such
as admitting a new partner or expelling a partner, require the
partners' unanimous consent.

Each partner owes a fiduciary duty to the partnership and to
copartners. This duty requires that a partner deal with copartners in
Good Faith, and it also requires a partner to account to copartners
for any benefit that he or she receives while engaged in partnership
business. If a partner generates profits for the part-nership, for
example, that partner must hold the profits as a trustee for the
partnership. Each partner also has a duty of loyalty to the
partnership. Unless copartners consent, a partner's duty of loyalty
restricts the partner from using partnership property for personal
benefit and restricts the partner from competing with the
partnership, engaging in self-dealing, or usurping partnership
opportunities.

Liability

Generally, each partner is jointly liable with the partnership for the
obligations of the partnership. In many states each partner is jointly
and severally liable for the wrongful acts or omissions of a
copartner. Although a partner may be sued individually for all the
damages associated with a wrongful act, partnership agreements
generally provide for indemnification of the partner for the portion
of damages in excess of her or his own proportional share.

Some states that have adopted the RUPA provide that a partner is
jointly and severally liable for the debts and obligations of the
partnership. Nevertheless, before a partnership's creditor can levy a
judgment against an individual partner, certain conditions must be
met, including the return of an unsatisfied writ of execution against
the partnership. A partner may also agree that the creditor need not
exhaust partnership assets before proceeding to collect against that
partner. Finally, a court may allow a partnership creditor to proceed
against an individual partner in an attempt to satisfy the
partnership's obligations.


Dissolution

A dissolution of a partnership generally occurs when one of the
partners ceases to be a partner in the firm. Dissolution is distinct
from the termination of a partnership and the "winding up" of
partnership business. Although the term dissolution implies
termination, dissolution is actually the beginning of the process that
ultimately terminates a partnership. It is, in essence, a change in the
relationship between the partners. Accordingly, if a partner resigns
or if a partnership expels a partner, the partnership is considered
legally dissolved. Other causes of dissolution are the Bankruptcy or
death of a partner, an agreement of all partners to dissolve, or an
event that makes the partnership business illegal. For instance, if a
partnership operates a gambling casino and gambling subsequently
becomes illegal, the partnership will be considered legally dissolved.
In addition, a partner may withdraw from the partnership and
thereby cause a dissolution. If, however, the partner withdraws in
violation of a partnership agreement, the partner may be liable for
damages as a result of the untimely or unauthorized withdrawal.

After dissolution, the remaining partners may carry on the
partnership business, but the partnership is legally a new and
different partnership. A partnership agreement may provide for a
partner to leave the partnership without dissolving the partnership
but only if the departing partner's interests are bought by the
continuing partnership. Nevertheless, unless the partnership
agreement states otherwise, dissolution begins the process whereby
the partnership's business will ultimately be wound up and
terminated.

Dissociation

Under the RUPA, events that would otherwise cause dissolution are
instead classified as the dissociation of a partner. The causes of
dissociation are generally the same as those of dis-solution. Thus,
dissociation occurs upon receipt of a notice from a partner to
withdraw, by expulsion of a partner, or by bankruptcy-related
events such as the bankruptcy of a partner. Dissociation does not
immediately lead to the winding down of the partnership business.
Instead, if the partnership carries on the business and does not
dissolve, it must buy back the former partner's interest. If, however,
the partnership is dissolved under the RUPA, then its affairs must be
wound up and terminated.

Winding Up

Winding up refers to the procedure followed for distributing or
liquidating any remaining partnership assets after dissolution.
Winding up also provides a priority-based method for discharging
the obligations of the partnership, such as making payments to non-
partner creditors or to remaining partners. Only partners who have
not wrongfully caused dissolution or have not wrongfully
dissociated may participate in winding up the partnership's affairs.

State partnership statutes set the procedure to be used to wind up
partnership business. In addition, the partnership agreement may
alter the order of payment and the method of liquidating the assets
of the partnership. Generally, however, the liquidators of a
partnership pay non-partner creditors first, followed by partners
who are also creditors of the partnership. If any assets remain after
satisfying these obligations, then partners who have contributed
capital to the partnership are entitled to their capital contributions.
Any remaining assets are then divided among the remaining
partners in accordance with their respective share of partnership
profits.

Under the RUPA, creditors are paid first, including any partners who
are also creditors. Any excess funds are then distributed according
to the partnership's distribution of profits and losses. If profits or
losses result from a liquidation, such profits and losses are charged
to the partners' capital accounts. Accordingly, if a partner has a
negative balance upon winding up the partnership, that partner
must pay the amount necessary to bring his or her account to zero.

Limited Partnerships

A limited partnership is similar in many respects to a general
partnership, with one essential difference. Unlike a general
partnership, a limited partnership has one or more partners who
cannot participate in the management and control of the
partnership's business. A partner who has such limited participation
is considered a "limited partner" and does not generally incur
personal liability for the partnership's obligations. Generally, the
extent of liability for a limited partner is the limited partner's capital
contributions to the partnership. For this reason, limited
partnerships are often used to provide capital to a partnership
through the capital contributions of its limited partners. Limited
partnerships are frequently used in real estate and entertainment-
related transactions.

The limited partnership did not exist at Common Law. Like a general
partnership, however, a limited partnership may govern its affairs
according to a limited partnership agreement. Such an agreement,
however, will be subject to applicable state law. States have for the
most part relied on the Uniform Limited Partnership Act in adopting
their limited partnership legislation. The Uniform Limited
Partnership Act was revised in 1976 and 1985. Accordingly, a few
states have retained the old uniform act, and other states have relied
on either revision to the uniform act or on both revisions to the
uniform act.

A limited partnership must have one or more general partners who
manage the business and who are personally liable for partnership
debts. Although one partner may be both a limited and a general
partner, at all times there must be at least two different partners in a
limited partnership. A limited partner may lose protection against
personal liability if she or he participates in the management and
control of the partnership, contributes services to the partnership,
acts as a general partner, or knowingly allows her or his name to be
used in partnership business. However, "safe harbors" exist in which
a limited partner will not be found to have participated in the
"control" of the partnership business. Safe harbors include
consulting with the general partner with respect to partnership
business, being a contractor or employee of a general partner, or
winding up the limited partnership. If a limited partner is engaged
solely in one of the activities defined as a safe harbor, then he or she
is not considered a general partner with the accompanying potential
liability.

Except where a conflict exists, the law of general partnerships
applies equally to limited partnerships. Unlike general partnerships,
however, limited partnerships must file a certificate with the
appropriate state authority to form and carry on as a limited
partnership. Generally, a certificate of limited partnership includes
the limited partnership's name, the character of the limited
partnership's business, and the names and addresses of general
partners and limited partners. In addition, and because the limited
partnership has a set term of duration, the certificate must state the
date on which the limited partnership will dissolve. The contents of
the certificate, however, will vary from state to state, depending on
which uniform limited partnership act the state has adopted.

Answer No. 3
Business Law in Pakistan
This overview of business laws of Pakistan is a very brief
description of common forms of businesses adopted by private and
public sector investors in Pakistan. An attempt has also been made
to outline general requirements and regulatory regimes for each of
these forms of businesses in Pakistan. These brief notes are for
general guidance only and should not be taken as a substitute for
thorough and professional legal advice.

What are the common forms of business in Pakistan?
Main forms of business organisations adopted by private sector in
Pakistan are as follows:

1. Sole proprietorship
2. Partnership
3. Limited liability company
4. Joint venture

Main forms of business organisations adopted by the public sector,
where the government wishes to undertake an enterprise, in
Pakistan are either a limited liability company or a statutory
corporation.
Out of these diverse forms of business set ups in Pakistan, a limited
liability company remains the most favourable form of business
organisation for medium and large-scale businesses in Pakistan.

Business Laws of Pakistan
Relevant Laws of Pakistan
Companies Ordinance, 1984
Companies General Provisions and Forms Rules, 1985
Single Member Companies Rules, 2003
Schedule of Filing Fee


Companies remain the most favoured form of business organisation
in Pakistan especially for medium and large-scale business
enterprises. Legal regime for establishment and regulation of
companies in Pakistan is given in the Companies Ordinance, 1984.
Whereas the function of administration of these companies is vested
in the Securities and Exchange Commission of Pakistan and the
Registrar of Companies appointed by the Securities and Exchange
Commission of Pakistan for a province of Pakistan where such
company is to be registered.
Under the provisions of the Companies Ordinance, 1984 a company
is a body corporate with separate legal entity and a perpetual
succession and a company may be formed by persons associating for
any lawful purpose by subscribing their names to the Memorandum
of Association and complying with other requirements for
registration of a company under the provisions of the Ordinance.

The Companies Ordinance, 1984 provides for three different types
of companies:

A company limited by shares

A company limited by guarantee

An unlimited liability company


Further, under the Companies Ordinance, 1984 two types of limited
liability companies are provided for, namely:

A private limited company

A public limited company (which may be listed or unlisted)

Any one or more persons associated for any lawful purpose by
subscribing their name(s) to the Memorandum of Association and
complying with other registration specific requirements of the
Companies Ordinance, 1984 may incorporate a private limited
company. Provided that where a company has only one subscriber
to the Memorandum of Association then such a company is called a
Single Member Company, however, a Single Member Company
remains a private limited company for all intents and purposes of
the Ordinance. Whereas any three or more persons so associated
may form a public limited company. A company limited by shares,
whether a private company or a public company, is the most
common vehicle for carrying out a business enterprise in Pakistan.
Registration of a Company and Commencement of Business in
Pakistan

The first step toward incorporation of a company in Pakistan is to
file an application before the Registrar of Companies for availability
of name. If the proposed name of the company is available and it is
not in contravention to the provisions of the Companies Ordinance,
1984 and the Rules formed there under, then the Registrar shall
issue a certificate stating that the proposed name is available to be
adopted.

The next step is to file the Memorandum of Association and Articles
of Association, which in effect is the constitution of any company,
with the Registrar of Companies in the Province where proposed
company is to be incorporated, along with other necessary forms
prescribed under the Companies Ordinance, 1984. When the
company has been registered, the Registrar issues a Certificate
of Incorporation. Once such a certificate has been issued by the
Registrar a private limited company may commence its
business immediately. Nonetheless, a public limited company
cannot commence its business or exercise its borrowing
powers yet unless the Registrar has issued a Certificate for
Commencement of Business. The Registrar issues the
Certificate for Commencement of Business only if the following
requirements have been fulfilled:

1. Shares held subject to the payment of the whole amount thereof
in cash have been allotted to an amount not less in the whole than
the minimum subscription.

2. Every director of the company has paid to the company the full
amount on each of the shares taken or contracted to be taken by him
and for which he is liable to pay in cash.

3. No money is or may become liable to be repaid to applicants for
any shares or debentures which have been offered for public
subscription by reason of any failure to apply for or to obtain
permission for the shares or debentures to be dealt in on any stock
exchange.

4. There has been filed with the Registrar of Companies a duly
verified declaration by the chief executive or one of the directors
and the secretary in the prescribed form that the aforesaid
conditions have been complied with and the Registrar of Companies
has issued a Certificate of Commencement of Business.

5. In the case of a company which has not issued a prospectus
inviting the public to subscribe for its shares, there has been filed
with the Registrar of Companies, a statement in lieu of prospectus.

A public limited company may either be listed or unlisted. In case of
a listed company its shares may be quoted and dealt with on one of
the three stock exchanges of Pakistan viz. Karachi Stock Exchange,
Lahore Stock Exchange and Islamabad Stock Exchange. Whereas the
shares of an unlisted public limited company may not listed on a
stock exchange. A public limited company that intends to have its
shares listed on a stock exchange must obtain permission from the
relevant stock exchange under the listing regulations of that stock
exchange.
Company Registration in Pakistan How to register a private
limited company in Pakistan
It is very easy to set up a private limited company in Pakistan;
however, people generally dont know registration procedure. There
are large numbers of law firms working in the country to provide
consultancy for incorporation but it is always good to have little
knowledge about processes involved in registration.

In Pakistan, private limited companies are incorporated and
regulated by the Companies Ordinance, 1984 while Securities and
Exchange Commissioner of Pakistan (SECP) is a regulatory authority
established for regulation of stock markets and the Companies
ordinance, 1984. One of the important functions of the Commission
is the registration/incorporation of public and private limited
companies. Therefore, people who want to get their private limited
companies registered are supposed to apply to the commission. The
commission issues incorporation certificate when all requirements
are met by promoter(s) as per law.

Following steps are involved in incorporation process. The
explanation is oversimplified keeping in view that reader of this
article is a common man who doesnt have background of law or
business administration.

1. You are going to register a company and the first step is to name
that company. The SECP does not allow choosing name that is
otherwise inappropriate, deceptive or designed to exploit or offend
the religious susceptibilities of the people and neither is identical
nor closely resembling with the name of an existing company.
Moreover, SECP does not allow including prohibited words in name
of the company and if you want to know about these words click
here. After selection of name, make sure this name is valid according
to criteria laid down by the SECP. Click here to check validity of
proposed name of your private limited company.

2. Before applying for registration/incorporation you are required
to get name availability certificate from SECP. You may file
application before SECP for the purpose and application fee is Rs.
200 & Rs. 500 for online and offline application respectively. SECP
will issue a certificate to you regarding availability and validity of
proposed name of your company.

3. Now, at this step you are advised to decide authorized capital or
share capital of your company. It means total investment you have
to run your business. Registration fee is based on total share capital
and fee calculator will help you in calculating the same.

4. Start preparing your documents now. You need copies of National
Identity Cards (NICs) of each subscriber (you may say
shareholder), four printed copies of Memorandum of Association
and Articles of Association, Form I, Form 21 & Form 29, original
paid challan evidencing payment of fee in any of authorized
branches of MCB bank limited and authorization of sponsors in
favor of a person to make good the deficiencies, if any, pointed out
by the Registrar in any documents submitted for
incorporation/registration.

5. For understanding purposes, I would like to explain that
Memorandum of Association tells about business and sector of the
company e.g. travel agency, educational institution, trading,
supplies, chain of stores, manufacturing of cement etc. In other
words Memorandum of Association tells about relationship between
your company and outside.

On the other hand, Articles of Association tells about the day-to-day
working of the company i.e. how the company will run, how CEO and
directors will be appointed and about Annual General Meeting
(AGM) of the company etc..

Answer No. 4
Provisions as to applications for winding up.

- An application to the Court for the
winding up of a company shall be by petition presented, subject
to the provisions of this section,
either by the company, or by any creditor or creditors
(including any contingent or prospective
creditor or creditors), or by any contributory or contributories, or
by all or any of the aforesaid
parties, together or separately, or by the registrar, or by the
Commission or by a person
authorised by the Commission in that behalf.
Provided that-

(a) a contributory shall not be entitled to present a petition for
winding up a company
unless-

(i) either the number of members is reduced, in the case of a private
company,
below two, or, in the case of any other company, below seven; or

(ii) the shares in respect of which he is a contributory or some of
them either
were originally allotted to him or have been held by him, and
registered in
his name, for at least six months during the eighteen months before
the
commencement of the winding up, or have or devolved on him
through the
death of a former holder;

(b) the registrar shall not be entitled to present a petition for the
winding up of a
company unless the previous sanction of the Commission has been
obtained to the
presentation of the petition:
Provided that no such sanction shall be given unless the company
has first been
afforded an opportunity of making a representation and of being
heard;

(c) the Commission or a person aurhorised by the Commission in
that behalf shall not
be entitled to present a petition for the winding up of a company
unless an
investigation into the affairs of the company has revealed that it was
formed for any
fraudulent or unlawful purpose or that it is carrying on a business
not authorised
by its memorandum or that its business is being conducted in a
manner
oppressive to any of its members or persons concerned in the
formation of the
company or that its management has been guilty of fraud,
misfeasance or
other misconduct towards the company or towards any to its
members; and such
petition shall not be presented or authorised to be presented by the
Commission
unless the company has been afforded an opportunity of making a
representation
and of being heard;

(d) the Court shall not give a hearing to a petition for winding up a
company by a
contingent or prospective creditor until such security for costs has
been given as
the Court thinks reasonable and until a prima facie case for winding
up has been
established to the satisfaction of the Court;
(e) the Court shall not give a hearing to a petition for winding up a
company by the
company until the company has furnished with its petition, in the
prescribed
manner, the particulars of its assets and liabilities and business
operations and the
suits or proceedings pending against it.

Right to present winding up petition where company is being
wound up
voluntarily or subject to Court's supervision. - (1) Where a company
is being wound up
voluntarily or subject to the supervision of the Court, a petition for
its winding up by the Court
may be presented by any person authorised to do so under section
309 and subject to the
provisions of that section.(2) The Court shall not make a winding up
order on a petition presented to it under
sub-section (1) unless it is satisfied that the voluntary winding up or
winding up subject to the
supervision of the Court cannot be continued with due regard to the
interests of the
creditors or contributories or both.


COMMENCEMENT OF WINDING UP
Commencement of winding up by Court.

- A winding up of a company by the Court
shall be deemed to commence at the time of the presentation of the
petition for the winding up.

POWERS OF COURT HEARING APPLICATION
Hearing of winding up petition by the Court.
- A petition for winding up of a company
shall come up for regular hearing, be proceeded with and decided in
the manner laid down in
section 9.
Court may grant injunction.
- The Court may, at any time after presentation of
the petition for winding up a company under this Ordinance, and
before making an order for its
winding up, upon the application of the company itself or of any its
creditors or contributories,
restrain further proceedings in any suit or proceeding against the
company, upon such terms as
the Court thinks fit.
Powers of Court on hearing petition
. - (1) On hearing a winding up petition the Court
may dismiss it with or without costs, or adjourn the hearing
conditionally or unconditionally subject
to the limitation imposed in section 9 or make any interim order, or
an order for winding up the
company or any other order that it deems just; but the Court shall
not refuse to make a winding
up order on the ground only that the assets of the company have
been mortgaged to an amount
equal to or in excess of those assets, or that the company has no
assets.
(2) Where the petition is presented on the ground that it is just and
equitable that the
company should be wound up, the Court may refuse to make an
order of winding up, if it is of
opinion that some other remedy is available to the petitioners and
that they are acting
unreasonably in seeking to have the company wound up instead of
pursuing that other remedy.
(3) Where the petition is presented on the ground of default in
delivering the statutory
report or in holding the statutory meeting or any two consecutive
annual general meetings, the
Court may, instead of making a winding up order, direct that the
statutory report shall be
delivered or that a meeting shall be held, and order that costs to be
paid by any persons who, in
the opinion of the Court, are responsible for the default.
(4) If, on hearing a petition, the Court is of opinion that, although the
facts would
justify the making of a winding up order, the making of such order
would unfairly prejudice the
members or the creditors, the Court may, instead of making an
order for winding up the
company, make such order as it thinks fit in the circumstances for
regulating the conduct
of the affairs of the company and bringing to an end the matters
complained of, including an
order for a change in the management of the company.
(5) Where the Court makes an order for the winding up of a
company, it shall forthwith
cause intimation thereof to be sent to the official liquidator
appointed by it and to the registrar.

Copy of winding up order to be filed with registrar.

- (1) Within fifteen days from the
date of the making of the winding up order, the petitioner in the
winding up proceedings and the
company shall file a certified copy of the order with the registrar.
(2) If default is made in complying with the foregoing provision, the
petitioner or, as the
case may require, the company, and every officer of the company
who is in default, shall be
punishable with fine which may extend to one hundred rupees for
each day during which the
default continues.
(3) On the filing of a certified copy of a winding up order, the
registrar shall forthwith
make a minute thereof in his books relating to the company, and
shall simultaneously notify in the
official Gazette that such an order has been made.
(4) Such order shall be deemed to be notice of discharge to the
servants of the
company, except when the business of the company is continued.


Suits stayed on winding up order.

- (1) When a winding up order has been made or a
provisional manager has been appointed, no suit or other legal
proceeding shall be proceeded
with or commenced against the company except by leave of the
Court, and subject to such terms
as the Court may impose.(2) The Court which is winding up the
company shall, notwithstanding anything
contained in any other law for the time being in force, have
jurisdiction to entertain, or dispose of,
any suit or proceeding by or against the company.
(3) Any suit or proceeding by or against the company which is
pending in any Court
other than that in which the winding up of the company is
proceeding may, notwithstanding
anything contained in any other law for the time being in force, be
transferred to and
disposed of by the Court.


Answer No. 5
Sales of goods act and discuss the essential characteristics of a
contract of sales of goods
Sales of Goods Act :-
It is defined in these words, "A contract where by the seller transfers
or agrees to transfer the property or the goods to the buyer for
price."

A contract to transfer the ownership of goods from seller to the
buyer is known as contract of sale.


Main Features or Essentials

1. Buyer and Seller :-
One person cannot become buyer and also the seller, there are
always two parties to a contract of sale, buyer and seller.

Example :- Mr. Kashif sells the shop to Mr. Zahir. Mr. Kashif is a
seller and Mr. Zahir is a buyer in this case.


2. Goods :-
Every kind of movable property except actionable claims (which can
be enforced by legal action) and money is regarded as goods.

Example :- Mr. Yuva sells his car to Mr. Larson for Rs. 7 lac. In this
case car is a moveable property, so it is a contract of sale.


3. Price :-
Price must be the consideration in the contract of sale. If goods are
exchanged with goods it is barter and not a contract of sale.

Example :- "X" sells a book to "Y" for Rs. 300. It is a contract of sale.


4. Transfer of Ownership :-
To constitute the sale contract the seller must transfer or agree to
transfer the property ownership to the buyers. So possession and
ownership both will be transferred to buyer.

Example :- "X" sells the car to "Y" for 6 lac. The possession and
ownership both will transfer to "Y".


5. Sale :-
When ownership and possession of the good is immediately
transferred from seller to buyer it is called contract of sale.

Example :- "X" buys a pen from the "Y" and pays the whole price on
his hand. It is a sale.


6. Agreement to Sell :-
When the transfer of ownership in the goods is to take place at a
future date the contract is called agreement to sell.

Example :-

Mr. Bazooka agrees to purchase Mr. Titoo bus for Rs. 25 lac. But the
transfer of bus will take place after one year. It is agreement to sell.

Characteristics of a Contract for a Sale of Goods

Contracts for the sale of goods within the United States are governed
by Article 2 of the Uniform Commercial Code (UCC). The UCC is the
standard set of business laws that regulate financial contracts.
Characteristics of a contract for the sale of goods include
identification of quantity, price terms and delivery terms. If a party
breaches a sales contract, parties have extensive legal remedies. UCC
2 contracts are considered more flexible than their counterpart
contracts for services, which are governed by common law.

Forming a Contract
Sales contracts can be formed orally if they are under $500 or
capable of being performed within one year. There must be a
"meeting of the minds" between both parties to a sales contract and
each party must objectively believe the other is intending to be
legally bound. Contracts for amounts in excess of $500 or for one
year or more must be written and signed by both parties. A contract
is formed when one party makes an offer and the other party
accepts. There must be an exchange between the parties of
something for value, known as consideration.

Terms
The one term that must be present in a sales contract is a quantity
term. The quantity term must set forth the amount of the product to
be shipped or supplied. Parties should include a price term as well.
Delivery terms are often included, such as whether the buyer will
pick up the items at the seller's place of business or if the seller will
arrange delivery via freight carrier or some other means.



Leniency in Performance
Article 2 of the UCC is business friendly and encourages parties not
to hesitate in forming contracts. Slight glitches in performance will
not result in an automatic breach and parties are generally free to fix
the problem within a reasonable time. If a buyer orders 10 red
jackets in size large, for instance, and the seller sends 10 red jackets,
8 of which are size large and 2 of which are size extra-large, if buyer
notifies the seller of the deficiency, the seller will generally have an
opportunity to fix the mistake.

Remedies
In the event a breach of contract takes place, the UCC provides a
wide variety of means for the non-breaching party to recover the
money he lost in the deal. These are known as legal remedies.
Depending on the situation, remedies for breach are designed to
place the non-breaching party in the position he was in before the
other party breached the contract, e.g., if a party expected to sell 10
red jackets and due to supplier's breach was unable to sell any red
jackets, the buyer would have a cause of action for the price of the
10 jackets. Of course, the court will need evidence of the injured
party's damages, such as sales records indicating the usual sales
value of red jackets.