THE COMPANIES ORDINANCE, 1984

(XLVII OF 1984)
AN
ORDINANCE 
To consolidate and amend the law relating to companies and certain other associations

WHEREAS it is expedient to consolidate and amend the law relating to companies and
certain other associations for the purpose of healthy growth of the corporate enterprises,
protection of investors and creditors, promotion of investment and development of economy
and matters arising out of or connected therewith:

AND WHEREAS the President is satisfied that circumstances exist which render it
necessary to take immediate action:

NOW, THEREFORE, in pursuance of the Proclamation of the fifty day of July, 1977, and in
exercise of all powers enabling him in that behalf, the President is pleased to make and
promulgate the following Ordinance:--

PART I

PRELIMINARY

1. Short title, extent and commencement:-

(1) This Ordinance may be called the Companies Ordinance, 1984.

(2) It extends to the whole of Pakistan.

(3) This section shall come into force at once and the
remaining provisions of this Ordinance shall come into
  force on such date as the Federal Government may,
by notification in the official Gazette, appoint, and
different dates may be so appointed for different
provisions.

2. Definitions:-

(1) In this Ordinance, unless there is anything repugnant in the subject or context.--

(1) "article" means the articles of association of a company as originally framed or as

altered in accordance with the provisions of any previous Companies Act, or of this
Ordinance, including so far as they apply to the company, the regulations contained in Table
A in the First Schedule;

(2) "associated companies" and "associated undertakings" mean any two or more
companies or undertakings, or a company and undertaking interconnected with each other
in the following manner, namely:--

(i) if a person who is the owner or a partner or director of a company or undertaking or

who, directly or indirectly, holds or controls shares carrying not less than [ten per cent.] of
the voting power in such company or undertaking, is also the owner or partner or director of
another company or undertaking, or directly or directly or indirectly, holds or controls
shares carrying not less than [ten per cent.] or the voting power in that company or
undertaking; or

(ii) if the companies or undertakings are under common management or control or one is
the subsidiary of another; or

(iii) if the undertaking is a modaraba managed by the company;

and a person who is the owner of or a partner or director in a company or undertaking or,
who so holds or controls shares carrying not less than ten per cent of the voting power in a
company or undertaking, shall be deemed to be an "associated person" of every such other
person and of the person who is the owner of or a partner or director in such other company
or undertaking, or who so holds or controls such shares in such other company or
undertaking:

Provided that 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 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;

(3) "Authority" means the Corporate Law Authority constituted under section 11;

(4) "body corporate" or "corporation" includes a company incorporated outside

Pakistan, but does not include:-

(i) a corporation sole; or

(ii) a co-operative society registered under any law relating to the registration of co-
operative societies; or

(iii) any other body corporate, not being a company as defined in this Ordinance, which the
Federal Government may, by notification in the official Gazette, specify in this behalf;

(5) "book and paper", "book or paper" or "books of accounts" include accounts, deeds,
vouchers, registers,writings and documents;
(5-A) "central depository" means a central depository as defined in clause (cc) of section
2 of the Securities and Exchange Ordinance, 1969 (XVII of 1969), and registered with the
Authority under section 32-A of that Ordinance;

(6) "chief executive", in relation to a company 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 includes a director
or any other person occupying the position of a chief executive, by whatever name called,
and whether under a contract of service or otherwise;

(7) "company" means a company formed and registered under this Ordinance or an
existing company;

(8) "company limited by shares" means a company having the liabilities of its members
limited by the memorandum to the amount, if any, unpaid on the shares respectively held
by them;

(9) "company limited by guarantee" 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;

(10) [Omitted];

(11) "the Court" means the Court having jurisdiction under this Ordinance;

(12) "debenture" includes debenture stock, bands, [Term Finance Certificate] and any
other securities, other than a share, a company, whether constituting a charge on the
assets of the company or not;

(13) "director" includes any person occupying the position of a director, by whatever name
called;

(14) "document" includes summons, notice, requisition, order, other legal process,
voucher and register.

(15) "existing company" means a company formed and registered under any previous
Company Act;

(15-A) "financial institution" means an institution not less than fifty per cent of the share
capital of which is held by the Federal Government or a Provincial Government, whether
directly or through a company or corporation set up or controlled by such Government, and
includes such other institution or companies as the Federal Government may, by notification
in the official Gazette, specify for the purpose;

(16) "financial year", 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;

(17) "form" means a form set out in any of the schedules or prescribed;
(18) "holding company" means a holding company as defined in section 3;

(19) "listed", in relation to securities, means securities which have been allowed to be
traded on a stock exchange;

(20) "listed company" means a company or a body corporate or other body whose
securities are listed;

(21) "member" means, in relation to a company

having share capital, a subscriber to the memorandum
  of the company and every person to whom is allotted,
or who becomes the holder of, any share, scrip or
other security which gives him a voting right in the
company and whose name is entered in the register of
members, and, in relation to a company not having a share capital, any person who has
agreed to become a member of the company and whose name is so entered.

(22) "memorandum" 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.

(23) "modaraba" and "modaraba company" have the same meaning as in the Modarabe
Companies and Modaraba (Floatation and Control) Ordinance, 1980 (XXXI of 1980);

(24) "officer" includes any director, chief executive, managing agent, secretary or other
executive of the company, howsoever designated, but, save in sections 205, 220 to 224,
260, 261, 268, 351, 352, 412, 417, 418, 474 and 482, does not include an auditor;

(25) "participatory redeemable capital" means such redeemable capital as is entitled to

participate in the profit and loss of a company:

(26) "prescribed" means,--

(a) as respects the provisions of this Ordinance relating to the winding up of companies and
other matters requiring to be determined or decided by the Court, prescribed by rules made
by the Supreme Court in consultation with the High Courts or, where the Supreme Court
advises the Federal Government to do so, by the Federal Government in consultation with
the High Courts; and

(b) as respects the other provisions of this Ordinance, prescribed by rules or regulations
made by the Federal Government after previous publication in the official Gazette;

(27) "previous Companies Act" includes any Act or Acts relating to companies in force
before the Indian Companies Act, 1866 (X of 1866, or the Acts repealed thereby, the Indian
Companies Act, 1866 (X of 1866), the Indian Companies Act, 1882 (VI of 1882), the Indian
Companies Act, 1913 (VII of 1913), or any law corresponding to any o those Acts and in
force in any of the territories now constituting Pakistan before the extension of the
Companies Act, 1913 (VII of 1913), to such territories;

(28) "private company" means a company which, by its articles,-

(i)   restricts the right to transfer its shares, if any;

(ii)  limits the number of its members to fifty not including persons who are in the
employment of the company; and

(iii) prohibits any invitation to the public to subscribe for the shares, if any, or debentures 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:

(29) "prospectus" means any document described or issued as prospectus, and includes any
notice, circular, advertisement, or other communication, inviting offers from the the public
for the subscription or purchase or any shares in, or debentures of, a body corporate, or
inviting deposits from the public, other than deposits invited by a banking company or a
financial institution approved by the Federal Government, whether described as prospectus
or otherwise;

(30) "public company" means a company which is not a private company;

(30-A) "redeemable capital" includes finance obtained on the basis of participation term
certificate (PTC),, musharika certificate, term finance certificate (TFC), or any other security
or obligation not based on interest, other than an ordinary share of a company,
representing an instrument or a certificate of specified denomination called the face value or
nominal value, evidencing investment of the holder in the capital of the company on terms
and conditions of the agreement for the issue of such instrument or certificate or such other
certificate or instrument as the Federal Government may be notification in the official
Gazette, specify for the purpose;

(31) "register" means a registrar, an additional registrar, a joint registrar, a deputy

registrar or an assistant registrar, performing under this Ordinance the duty of registration
of companies;

(32) "scheduled bank" has the same meaning as in the State Bank of Pakistan Act, 1956
(XXXIII of 1956);

(33) "secretary" means any individual appointed to perform the secretarial, administrative
or other duties ordinarily performed by the secretary of a company;

(34) "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;

(35) "share" means share in the share capital of a company;

(36) "special 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 at a general
meeting of which not less than twenty-one days" 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 a special resolution at a meeting of which less
than twenty-one days notice has been given;

(37) "stock exchange" means a stock exchange registered under the Securities and
Exchange Ordinance, 1969 (XVII of 1969);

(38) "subsidiary company" or "subsidiary" means a subsidiary company as defined in

section 3;

(39) "Table A" means Table A in the First Schedule

(40) [Omitted].

(2) The expression "commencement of this Ordinance" in any provision of this

Ordinance means the coming into force of that provisions by virtue of a notification under
sub-section (3) of section 1.

3. Meaning of "subsidiary" and "holding company":-

(1) For purpose of this ordinance, a company or body corporate shall be deemed to be
subsidiary of another if--

(a) that order company or body corporate directly or indirectly controls, beneficially owns or
holds more than fifty per cent of its voting securities or otherwise has power to elect and
appoint more than fifty per cent of its directors; or

(b) the first mentioned company or body corporate is a subsidiary of any company or body
corporate which is that other's subsidiary:

Provided that, where a central depository holds more than fifty percent, of the voting
securities of a company, such company shall not be deemed to be a subsidiary of the
central depository save where such voting securities are held beneficially by the central
depository in its own behalf.

(2) For the purpose of this Ordinance, a company shall be deemed to be another's holding
company if, but only it, that other is its subsidiary.

4. Ordinance not to apply to certain corporations:-

Nothing in this Ordinance shall apply to:-

(i) a trading corporation owned or controlled by a Province and carrying on business only
within that Province; or

(ii)  a co-operative society; or

(iii)  a university. 
5. Application of Ordinance to non-trading companies with purely provincial
objects:-

The powers conferred by this Ordinance on the Federal Government or the Authority shall,
in relation to companies which are not trading corporations and the objects of which are
confined to a single Province, be the powers of the Provincial Government.

6. Ordinance to override memorandum, articles, etc:-

Save as otherwise expressly provided herein:-

(a) the provisions of the Ordinance which come into force by virtue of a notification under
sub-section (3) of section 1 shall have effect notwithstanding 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 the company in general meeting or by its directors, whether the
same be registered, executed or passed, as the case may be, before or after the coming
into force of the said provisions; and

(b) any provision contained in the memorandum, articles, agreement or resolution aforesaid
shall, to the extent to which it is repugnant to the aforesaid provisions of the Ordinance,
become or be void, as the case may be.

http://www.vakilno1.com/saarclaw/pak.htm