Q.

1 Process of Forming a Company under the Companies Act 2017 (Pakistan),Discuss the
liabilities associated with carrying on business with fewer than the required number of
members?
The Companies Act, 2017 governs the incorporation and regulation of companies in
Pakistan. Here is a step-by-step process for forming a company under this law:
Choose a Company Type: Decide on the type of company you want to form: Private Limited
Company, Public Limited Company, Single Member Company, etc. Name Approval: The
company must have a unique name that is not similar to any existing company. The name
must be approved by the Securities and Exchange Commission of Pakistan (SECP) through
its eServices portal.
Prepare Documents: Memorandum of Association (MOA): This document outlines the
objectives and scope of the business. It must clearly specify the company's activities. Articles
of Association (AOA): The AOA outlines the internal management and governance of the
company.
Form 1: This is the declaration of compliance with the provisions of the Companies Act.
Form 21:Consent of the directors to act as directors.
Form 29: Particulars of directors and officers.
Copy of National Identity Card: Of the members and directors.
File the Application with SECP:
All the required documents are submitted to the SECP, either online or through physical
submission, for the approval of the company’s incorporation.
Issue Certificate of Incorporation:
If everything is in order, the SECP issues the Certificate of Incorporation, marking the
company’s official establishment.
Post-Incorporation Formalities:
Obtain NTN (National Tax Number) from the Federal Board of Revenue (FBR). Open a
bank account in the company’s name.
Register with the relevant authorities based on the nature of the business (e.g., sales tax, etc.).
Liabilities Associated with Carrying on Business Without the Required Number of Members
The Companies Act, 2017 specifies the minimum number of members required for various
types of companies. For example:
A Private Limited Company must have at least two members.
A Public Limited Company requires a minimum of seven members.
If a company carries on business with fewer members than required by the Act, several
liabilities and issues may arise:
Legal Consequences:
Non-compliance: Operating with fewer members than the law requires could lead to the
company being in violation of the Act. The SECP has the authority to take legal action,
including the possibility of winding up the company.
Liability of Directors and Shareholders:
If a company continues its business despite not meeting the required member count, the
directors and shareholders could become personally liable for the company's debts and
obligations.
Inability to Enter Contracts:
A company may find it challenging to enter into binding contracts or agreements if its
incorporation is not compliant with the law, as third parties might question its legal standing.
Tax Implications:
Operating with insufficient members can lead to issues with the tax authorities. If the
company is registered improperly, it may face challenges with obtaining the necessary tax
registrations or even incur penalties from the Federal Board of Revenue (FBR) for failing to
meet corporate compliance.
Winding-up or Closure of Company:
In some cases, if the company does not meet the legal requirements, the SECP may order a
winding-up or dissolution of the company. This could lead to financial losses, legal costs, and
damage to the business’s reputation.
In conclusion, it is essential to maintain the required number of members in order to stay
compliant with the Companies Act, 2017. Failure to do so can expose the company and its
stakeholders to significant liabilities, including legal and financial risks.
Q.2 Analyze the obligation and requirements for the registration of a memorandum and article
under companies act 2017?
Under the Companies Act, 2017 (of Pakistan), the memorandum of association and articles
of association are key documents required for the formation and operation of a company.
These documents need to be properly registered with the Securities and Exchange
Commission of Pakistan (SECP) to ensure that the company is legally recognized and
compliant with the law.
1. Memorandum of Association (MoA)
The memorandum of association outlines the company's main objectives, powers, and scope
of operations. It defines the company's relationship with the outside world, detailing:
Name of the company.
Registered office (i.e., the location of the company’s headquarters).
Objects of the company (i.e., the primary business activities the company will engage in).
Liability of members (whether it is limited or unlimited).
Share capital (for companies limited by shares, it mentions the total share capital and the
number of shares).
Association clause (which is a declaration of the intention of the members to form the
company).
Requirements for MoA Registration:
The MoA must be signed by at least two subscribers (for private companies) or seven
subscribers (for public companies).
It must be signed in the presence of a witness.
The MoA must be filed with the SECP as part of the incorporation process.
The object clause of the MoA must be clearly stated and should be in line with the permissible
business activities under Pakistani law.
2. Articles of Association (AoA)
The articles of association define the rules governing the internal management of the
company. It lays out the framework for the company's governance and operational
procedures, including:
Shareholders' rights and responsibilities. Director's powers and duties. Procedures for
meetings and voting. Dividend policy. Transfer and issuance of shares. Appointment and
removal of directors. Requirements for AoA Registration: The AoA must be filed with the
SECP during the incorporation process. It must be signed by the subscribers or members of
the company. The provisions in the AoA cannot conflict with the Companies Act, 2017 or
any other applicable laws. The AoA can either be adopted from the model articles provided
by the SECP or can be customized to suit the specific needs of the company.
3. Process of Registration
Filing with SECP: Both the MoA and AoA must be submitted to the SECP as part of the
incorporation documents. This can be done through the SECP’s eServices Portal or in paper
form.
Verification: The SECP will verify the documents to ensure they meet the legal requirements
and comply with the provisions of the Companies Act, 2017.
Incorporation Certificate: Once the MoA and AoA are approved, the SECP issues a
Certificate of Incorporation confirming the registration of the company.
4. Legal Provisions
Section 16 of the Companies Act, 2017 specifies the requirement for the MoA and AoA to be
filed at the time of company registration.
Section 31 to 35 of the Companies Act, 2017 outlines the content and legal requirements for
both the MoA and AoA.
Section 14 clarifies that a company's activities must be consistent with its object clause in the
MoA, and it cannot engage in business activities beyond what is specified in the MoA.
Under the Companies Act, 2017, the registration of the memorandum and articles of
association is a crucial step for legally establishing a company. These documents outline the
company's objectives, governance structure, and internal operations. Compliance with the
legal requirements of the MoA and AoA registration ensures that a company operates
smoothly within the bounds of Pakistani law.

Q.3Describe the jurisdiction of court and the creation of benches. How do these provisions
ensure efficient handling of corporate disputes?
The jurisdiction of a court refers to its authority to hear and decide cases within a certain
geographical area, legal matter, or subject. In the context of corporate disputes, jurisdiction
can be categorized into several types:
Territorial Jurisdiction: This defines the geographical area within which a court can
adjudicate cases. In corporate disputes, the court's territorial jurisdiction may depend on
where the company is registered, where the dispute arose, or where the parties are located.
Subject-Matter Jurisdiction: Corporate disputes usually fall under commercial or business
law. Courts with subject-matter jurisdiction in corporate disputes are typically commercial
courts or specialized business or corporate divisions in a larger legal system.
Appellate Jurisdiction: Some courts may only have the authority to hear appeals from lower
courts or tribunals. In corporate matters, this ensures that complex disputes can be reviewed
by higher courts with the requisite expertise.
Creation of Benches:
To ensure that corporate disputes are handled efficiently, many jurisdictions establish
specialized benches or divisions. These are dedicated courts or units within the judicial
system that focus solely on resolving corporate, commercial, and business-related disputes.
For example, Commercial Courts or Corporate Divisions may be set up to streamline the
process for these types of cases.
Key Provisions to Ensure Efficient Handling of Corporate Disputes:
Specialized Benches: The creation of benches dedicated to corporate disputes ensures that
judges have the expertise to deal with complex business and financial matters. This
specialization helps streamline case proceedings and improves the quality of judgments.
Expedited Procedures: These courts or benches often implement specific rules that expedite
the litigation process, minimizing delays in the resolution of corporate disputes.
Use of Alternate Dispute Resolution (ADR): Many jurisdictions encourage ADR methods
like mediation, arbitration, or conciliation to resolve corporate disputes efficiently, reducing
the burden on the courts and facilitating faster resolutions.
Sector-Specific Judges: Judges in these benches may have a background in commercial law,
accounting, or other relevant areas, enabling them to better understand the technicalities
involved in corporate disputes.

Prevention of Jurisdictional Conflicts: By clearly defining which courts or benches have

authority over corporate cases, there is less chance of jurisdictional conflicts, and parties can
file cases in the right forum.
Flexibility in Procedure: Specialized benches may also have rules that allow for more flexible
procedures, such as the use of technology for hearings or simplified documentation for
complex corporate matters.
Overall, these provisions ensure that corporate disputes are handled by courts with the
appropriate expertise, within an efficient framework, and with minimal delays. This can lead
to quicker resolutions, preserving business operations and reducing the costs of protracted
litigation.
Q.4Explain the significance of statuary meeting, for a public company with a share capital.
What are the key, component. that must be included in statutory report, how does this meeting
impact the company's compliance with the companies Act 2017?
Significance of Statutory Meeting for a Public Company with Share Capital
A statutory meeting is a mandatory meeting that a public company with share capital must
hold within a specific period after incorporation. According to the Companies Act 2017
(Pakistan), this meeting is required to ensure that shareholders are informed about the
company’s financial and operational status at an early stage.
Key Significance:
Transparency & Accountability: It provides shareholders with an overview of the company's
financial health, initial business operations, and any contracts entered into.
Compliance Requirement: Holding this meeting ensures compliance with the Companies Act
2017, preventing legal penalties.
Investor Confidence: By presenting the statutory report, the company reassures investors
about its financial position and governance structure.
Key Components of the Statutory Report
 Share Allotment Details: Number and type of shares allotted and consideration
received.
 Company’s Financial Position: A summary of receipts, expenses, and balance sheet
details.
 Directors & Management Details: List of directors, auditors, and other key officials.
 Contracts & Preliminary Expenses: A statement of company contracts and expenses
incurred before incorporation.
 Calls on Shares: Amount of money received from shareholders and any unpaid
amounts.
 Underwriting Details: If any shares were underwritten, details of such arrangements.
 Any Other Information: Any important decisions or activities affecting the
company's operation.
Impact on Compliance with the Companies Act 2017
Mandatory Requirement: As per the Companies Act 2017, a public company with share
capital must hold this meeting within three to six months of incorporation.
Filing with SECP: A copy of the statutory report must be filed with the Securities and
Exchange Commission of Pakistan (SECP) at least 21 days before the meeting.
Legal Consequences for Non-Compliance: Failure to hold the statutory meeting or file the
statutory report can lead to:
Regulatory penalties imposed by SECP.
Risk of winding up by court orders if the company fails to meet compliance obligations.
Loss of investor trust, affecting future capital raising.
Conclusion The statutory meeting is a crucial step in a public company’s compliance
journey, ensuring transparency, governance, and investor confidence. By holding the
meeting on time and preparing a comprehensive statutory report, the company adheres to
legal requirements under the Companies Act 2017, avoiding penalties and maintaining a
good reputation in the business environment.