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Key Terms Circular Guidance by Authority.

. Authority: Regulatory Body Definitions o Means: As stated by law (Exhaustive) o Includes: With general understanding & dictionary meaning. o Means & Includes: Stated by law but also includes specific areas defined o Means & Excludes: Stated by law but does not include some specific areas. Statutory Revision Order (SRO): Revision direction by Authority in Statute to make it more accessible, understandable and usable. Rules: Practical implementation of law. Framing of Law (Interchangeable Use) o Enactment: A law that is passed. o Promulgation: To officially announce, to publish. o Legislation: A bill being considered by a legislature that will become law if passed. Key Definitions (Section 2) Articles The Regulations for Running of Corporate Structure u/s 2(1) means the articles of association of a company 1 as originally framed or as altered in accordance with the provisions of any previous Companies Act 2 , or of this Ordinance, including, so far as they apply to the company, the regulations contained in Table A in the First Schedule Memorandum Constitution of a Company u/s 2(22) 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 Body Corporate or Corporation u/s 2(4) Includes a company incorporated outside Pakistan, but does not includei. a corporation sole; or ii. a registered corporative society; or iii. any other body corporate, not being a company as defined in this ordinance, which the Federal Government may, by notification 3 in the official Gazette 4 , specify in this behalf; Book and Paper, Book or Paper or Books of Account u/s 2(5) Includes accounts, deeds, vouchers, writing and documents 5 , maintained on paper or computer network, floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media; Stock Exchange u/s 2(37) Means a stock exchange registered under the Securities and Exchange Ordinance, 1969;

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Company: Means a company formed and registered under this Ordinance or an existing company: Previous Companies Act: Includes any Act or Acts relating to companies in force before the Indian Companies Act, 1866, or the Acts repealed thereby, the Indian Companies Act 1866, the Indian Companies Act 1882, the Indian Companies Act 1913, or any law corresponding to any of those Acts and in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 to such territories. 3 Notification: Publication issued by legislature or Government 4 Gazette: Government Newspaper 5 Documents: Includes summons, notice, requisition, order, other legal process, voucher and register whether issued, sent or kept in pursuance of this Ordinance or any other law for the time being in force, whether maintained in any medium capable of being retrieved by any electronic means or in any other manner;

Central Depository u/s 2(5A) Means a central depository as defined in clause (cc) of section 2 of the Securities and Exchange Ordinance, 1969 and registered with the Commission 6 under Section 32A of that Ordinance; Chief Executive u/s 2(6) 7 In relation to a company 1. Means an individual who, subject to the control and directions of the directors, is entrusted with the whole, or substantially the whole, of the powers of management of the affairs of the company, and 2. Includes a director 8 or any other person occupying the position of a chief executive, by whatever name called, and whether under a contract of service or otherwise; Member u/s 2(21) Means in relation to a Company, 1) Having share capital In relation to a company 1. Having Share Capital a) Subscriber to the memorandum of the a. Subscriber company and b. Allotee b) Every person to whom is allotted, or c. Holder c) Who becomes holder of, 2. Not having share Capital a. Agreeing to be a member Any share 9 , scrip or other security 10 which gives him a voting right in the company and whose name is entered in the register 11 of members, and in relation to a company 2) Not having share capital a) Any person who has agreed to become a member of the company and whose name is so entered; Company Limited by shares u/s 2(8) Means a company having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them; Company Limited by Guarantee u/s 2(9) 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;

Commission: Means the Securities and Exchange Commission of Pakistan established under section 3 of the Securities and Exchange Commission of Pakistan Act, 1997 7 Chief Executive An Individual Appointed Under Control & Directions of Board of Directors Substantial Management Powers (look to be whole) Includes a Director Under a Contract Maximum for 3 years 8 Director: Includes any person occupying the position of a director, by whatever name called; 9 Share: Means share in the share capital of a company; 10 Security: Means any share, scrip, debenture, participation term certificate, modaraba certificate, 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; 11 Register: Means the register of members of a company and includes the register of debenture-holders or holders of other securities maintained on paper or computer network, floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media;

Financial Institution u/s 2(15A) Includes,a) A company or an institution whether established under any special enactment 12 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 fianc company, a non-banking finance company; and c) Such other institution or companies authorized by law to undertake any similar business, as the Federal Government may, by notification in the official Gazette specify for the purpose; Financial Year u/s 2(16) 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; Private Company 13 u/s 2(28) Means a company which, by its articles, a) Restricts the right to transfer its shares, if any; b) Limits the number of its members to 50 not including persons who are in the employment of the company; and c) Prohibits any invitation to the public to subscribe for the shares, if any, or debentures 14 of the company; Provided that, where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this definition, be treated as a single member; Special Resolution 15 u/s 2(36) Means a resolution which has been passed by a majority of not less than three-fourths of such members entitled to vote as are present in person or by proxy 16 at a general meeting 17 of which not less than twenty one day 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;


Enactment: A law that is passed


Private Company Restriction on transfer Members not exceeding 50 Prohibition on public invitation 14 Debenture: Includes debenture stock, bonds, term finance certificate and any other securities, other than a share, of a company, whether constituting a charge of the assets of the company or not 15 Special Resolution Not less than 3/4th Majority 21 Day Notice Intention Section 160(1)b Except, when o 100% present, and o Agree to waiver of Notice 16 Proxy: Exercising voting power of another person 17 General Meeting: Shareholders Meeting

Prospectus u/s 2(29) 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 debentures of, a body corporate, or Inviting deposits from the public, other than deposits invited by a a banking company or a financial institution approved by the Federal Government, Whether described as prospectus or otherwise; Subsidiary u/s 3(1)

Holding Company u/s 3(2) For the purpose of this ordinance, a company shall be deemed to be anothers holding company if, but only if, that other is its subsidiary. Remember, Every law begins with Name Jurisdiction Date of Enforcement Ordinance not to apply to Certain Corporations u/s 4 1) A trading corporation owner or controlled by a province and carrying on business only within that province; or 2) A Co-operative Society; or 3) A University Application of Ordinance to non-trading Companies with purely provincial Objects u/s 5 Province will have powers of Companies Ordinance and commission with respect to NonTrading companies with objects confined to single province.

Ordinance to Override memorandum, articles etc. u/s 6 Prospective 18 provisions of the ordinance will have effect notwithstanding 19 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 Company in General Meeting or by its directors, whether the same be passed, executed or passed, as the case may be, before or after the coming into force of the said provision; and Any provision contained in the memorandum, articles, agreements etc shall, to the extent to which it is repugnant 20 to provisions of the ordinance, be void Associated Companies or Associated Undertakings u/s 2(2) 1) Companies or undertakings are associated, when a person is a director, a Chief executive or has 20% voting powers in Company/Undertaking and he is also a director, a chief executive or has 20% voting powers in another Company/Undertaking, OR Both are under common management and control, OR One is a subsidiary of another

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: 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; 1[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;

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Prospective: Relating to Future date. (NOTE: Civil laws are prospective in nature) Notwithstanding: Regardless 20 Repugnant: Clashing, Not acceptable