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Corporate law

Se ction – b

Repor t on types of companie s

Submitted to

Sir baber sale em

Gr oup member s

Ghulam abid

Saad mazhar

Mohammad far eed

Mohammad wahaj

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ACKNOWLEDGEMENT

First of all I thank to ALLAH ALMIGHTY .We are very grateful to our respected Sir Baber Saleem who gave

me this opportunity. This is to acknowledge that our instructor has excellently treated us and shared his

experiences and expertise with al the group members and helped us through out the prepration of this

report as well as presentation. Therefore all the members of the group are heartly thankful to Sir Baber

for his co-operation and precious time. We Ghulam Abid, Saad Mazhar,Fareed Hameed and Mohammad

Wahaj dedicate this complete presentation to her for his kindness and support.

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EXECUTIVE SUMMARY

A company is an association or collection of individuals, whether natural persons, legal persons, or a

mixture of both. Company members share a common purpose and unite in order to focus their various

talents and organize their collectively available skills or resources to achieve specific, declared goals.

The companies which are formed under special statutes are termed as statutory companies. These are

governed by the Acts or Ordinance through which these are created. Example of such type of companies

is the state Bank of Pakistan, small Business Finance Corporation, investment Corporation of Pakistan,

etc. A statutory corporation is a corporation created by statute

Chartered companies are formed by means of a special charter granted by the head of state, or King or

Queen of the Crown. Normally these enjoy certain exclusive rights and privileges on other associations

of persons. A government company is a company of which not less than 51% (fifty-one percent) of the

paid up capital is held by the Government. A company which is a subsidiary of a Government company

automatically becomes a Government company. The defining characteristics are that they have a

distinct legal form and they are established to operate in commercial affairs.

A company other than a company registered as private limited company is called public limited

company. Companies’ ordinance defined certain conditions for public limited companies which are as

under:

A company registered as public limited company does not impose any restrictions on the number of

members that the company can have.

A Public company is a company which does not impose any restricti on on the right of transfer of its

shares. Listed company is the company which has its shares listed on any stock exchange.Unlisted Public

companies are those companies whose shares are not listed on any stock exchange of the country and

these type of companies are not allowed to trade their shares through stock exchange.

It means a company whose memorandum of association limited the liabilities of its members to the

amount as the members may respectively under take to contribute to the assets of the company in the

event of its winding up. This company may or not have a share capital.

In a company limited by guarantee, there are no shares - hence there are no shareholders. Instead, the

company will have 'members'. The members of a company limited by guarantee are bound by a

guarantee in the company's articles of association, which requires them to pay the company's debts up

to a fixed sum. It is a company which is registered without limited the liability of the members to the

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extent of the value of the shares held by them. Now-a-days such type of companies is not found in

Pakistan.

Table of Contents

Company ---------------------------------------------------------------------- 01

Types of Companies --------------------------------------------------------- 01

Statutory Company ----------------------------------------------------------- 01

Chartered company----------------------------------------------------------- 02

Government company-------------------------------------------------------- 02

Registered companies -------------------------------------------------------- 03

Company limited by shares -------------------------------------------------- 04

Private limited company ------------------------------------------------------04

Public listed company ---------------------------------------------------------05

Company limited by Guarantee ----------------------------------------------06

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Public Unlisted Company------------------------------------------------------

COMAPANY

A company is an association or collection of individuals, whether natural persons, legal persons, or

a mixture of both. Company members share a common purpose and unite in order to focus

their various talents and organize their collectively available skills or resources to achieve specific,

declared goals.

TYPES OF COMPANIES

Following are the types of companies:

1. Statutory Company

2. Chartered Company

3. Government Company

4. Single Member Company

5. Registered Company

STATUTORY COMPANY:

The companies which are formed under special statutes are termed as statutory companies.

These are governed by the Acts or Ordinance through which these are created. Example of such

type of companies is the state Bank of Pakistan, small Business Finance corporation, investment

Corporation of Pakistan, etc. A statutory corporation is a corporation created by statute. Their

precise nature varies by jurisdiction thus they might be ordinary companies/corporations

owned by a government with or without other shareholders, or they might be a body without

shareholders which is controlled by national or sub-national government to the (in some cases

minimal) extent provided for in the creating legislation.

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Bodies described in the English language as "statutory corporations" exist in the following

countries in accordance with the associated descriptions.

CHARTERED COMPANY:

Chartered companies are formed by means of a special charter granted by the head of

state, or King or Queen of the Crown. Normally these enjoy certain exclusive rights and

privileges on other associations of persons. The East India Company and the Chartered Bank of

England are examples of such type of companies. A chartered company is an association

formed by investors or shareholders for the purpose of trade, exploration and colonization.

Chartered companies were usually formed, incorporated and legitimized under a royal or, in

republics, an equivalent government charter. This document set out the terms under which the

company could trade; defined its boundaries of influence, and described its rights and

responsibilities.

GOVERNMENT COMPANY:

A government company is a company of which not less than 51% (fifty-one percent) of

the paid up capital is held by the Government. A company which is a subsidiary of a

Government company automatically becomes a Government company. government-owned

corporation, state-owned company, state-owned enterprise, state-owned entity, state

enterprise, publicly owned corporation, government business enterprise, commercial

government agency, public sector undertaking is a legal entity that undertakes commercial

activities on behalf of an owner government. Their legal status varies from being a part of

government to stock companies with a state as a regular stockholder. There is no standard

definition of a government-owned corporation (GOC) or state-owned enterprise (SOE),

although the two terms can be used interchangeably. The defining characteristics are that they

have a distinct legal form and they are established to operate in commercial affairs. While they

may also have public policy objectives, GOCs should be differentiated from other forms of

government agencies or state entities established to pursue purely non-financial objectives

Government-owned corporations are common with natural monopolies and infrastructure such

as railways and telecommunications, strategic goods and services (mail, weapons), natural

resources and energy, politically sensitive business, broadcasting, demerit goods (alcohol) and

merit goods (healthcare). GOCs can be fully owned or partially owned by government. As a

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definitional issue, it is difficult to determine categorically what level of state ownership would

qualify an entity to be considered as "state-owned", since governments can also own regular

stock, without implying any special interference.

SINGLE MEMBER COMPANY

Single member company (SMC) has been introduced through the companies Ordinance

2002.The Single Member Company shall have all the rules and rights and privileges as well as

obligations and liabilities as other private company has.

REGISTERED COMPANY:

Registered companies are those companies which are registered in Pakistan under the

Companies Ordinance, 1984 or any previous Companies Act or Ordinance. A corporation that

has filed a registration statement with the Security Exchange Commission prior to releasing a

new stock issue.

Registered companies are further classified into the following three broad classification:

Company Limited by Shares

Companies Limited by Guarantee

Unlimited Company

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COMPANY LIMITED BY SHARES

It means a company whose memorandum of association limited the liabilities of its members to

the amount unpaid, if any, on the shares held by them in the capital of the company.

In such a company, the shareholders' obligation is to pay the company for the shares they have

taken in it. The individual puts money into the company, and in return the company gives it a

percentage of ownership, in the form of shares (how much of a company the individual in

question owns depends on how many shares he/she has in comparison with the other people,

if any, who own shares in that company). The price of an individual share can be any value -

usually, though, the 'nominal' value of a single share will be £1. (It is also common for shares to

be bought and sold at their 'market value' - i.e. what an investor deems them to be worth in

reality - but this is outside the scope of this website.)

Once the shares are fully paid for (and this would usually be the case with a private limited

company) no further money is payable by the shareholders. Their liability to the company is

satisfied. If the shares are issued unpaid (which can sometimes be the case for a variety of

reasons), then if the company is wound up it can call on the shareholders who have not paid for

their shares to do so. Either way, the liability of the shareholder is limited to the amount they

have paid, or they are due to pay, to provide adequate consideration for the shares that they

own. Company limited by share includes two categories:

Private Limited Company

Public limited Company

PRIVATE LIMITED COMPANY

As per the provisions of companies’ ordinance, 1984 private limited companies are defined as:

A private limited company is the company which restricts the right to the transfer the shares if

any.

Private Limited Company restricts the maximum number of members to be fifty.

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Private Limited Company prohibits any kind of invitation to general public to subscribe for its

any shares and pay any amount to the company in that respect.

PUBLIC COMPANY

A company other than a company registered as private limited company is called public limited

company. Companies’ ordinance defined certain conditions for public limited companies which

are as under:

A company registered as public limited company does not impose any restrictions on the

number of members that the company can have.

A Public company is a company which does not impose any restriction on the right of transfer

of its shares.

Public company does not impose any restriction on the invitation to general public to subscribe

for its shares and pay any amount in respect of that subscription. A public company can be

further classified into two categories:

Listed company

Unlisted company

Listed Companies

Listed company is the company which has its shares listed on any stock exchange. In Pakistan at

the moment companies are listed on three stock exchanges of the country namely Karachi

Stock Exchange, Lahore Stock Exchange and Islamabad Stock Exchange.

Unlisted Company

Unlisted Public companies are those companies whose shares are not listed on any stock

exchange of the country and these type of companies are not allowed to trade their shares

through stock exchange.

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COMPANY LIMITED BY GUARANTEE

It means a company whose memorandum of association limited the liabilities of its members to

the amount as the members may respectively under take to contribute to the assets of the

company in the event of its winding up. This company may or not have a share capital.

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.

In a company limited by guarantee, there are no shares - hence there are no shareholders.

Instead, the company will have 'members'. The members of a company limited by guarantee

are bound by a guarantee in the company's articles of association, which requires them to pay

the company's debts up to a fixed sum.

UNLIMITED COMPANY

It is a company which is registered without limited the liability of the members to the extent of

the value of the shares held by them. Now-a-days such type of companies is not found in

Pakistan.