Memorandum and articles Flashcards
Clauses of MOA
Name Clause
Registered Office Clause
Principal line of business Clause
Liability Clause
Authorised Share Capital Clause
Undertaking / Subscription Clause
Printing and signature of MOA & AOA
Borrowing powers to be part of memorandum
write a brief note on Name Clause
Name of company with following last word
- Public Co: “Limited”
- Private Co: “(Private) Limited”
- Single Member Company “(SMC-Private) Limited”
- Guarantee Ltd “(Guarantee) Limited”
- Unlimited: “Unlimited”
Registered Office Clause
Province or part of Pakistan not forming part of a province
(in which registered office is to be situated)
Principal line of business Clause
▪ Principal line of business will be mentioned in MOA
▪ It shall be matching with its name
“Principal line of business” means the business in which substantial assets are held or likely to be
held or substantial revenue is earned or likely to be earned by a company, whichever is higher.
▪ A company may carry on any lawful business or activity and do any act or enter into any
transaction connected to it which is necessary in attaining its business activities.
▪ A company shall not engage in a business which is:
- Prohibited by any law for the time being in force in Pakistan; or
- Restricted by any law, rules or regulations
(unless necessary licence, registration, permission or approval has been obtained)
Existing companies (those registered before Companies Act, 2017 was effective) may continue
with their existing MOA and their object clause be treated as the principal line of business
Liability Clause
Company Limited by Shares
“Liability of the Members is limited”
Company Limited by Guarantee
‘Liability of the members is limited’.
An additional sentence is also added to clarify the extent of liabilities of the members of that
company in the event of its being wound up.
Unlimited Company
“Liability of the Members is unlimited”
Authorised Share Capital Clause
Amount of share capital with which Co proposes to be registered, and the division into shares
of a fixed amount
▪ Every subscriber of MOA is required to take at least one share
▪ Each subscriber shall write opposite to his name the number of shares he has agreed to
take
▪ For company limited by guarantee, this clause shall not be included if company has no
share capital
Undertaking / Subscription Clause
The company shall add an undertaking, as may be specified by SECP.
Subscribers shall
▪ Write their names addresses and other required particulars
▪ Write following sentence:
“We, the several persons whose names and addresses are subscribed, are desirous of being
formed into a company, in pursuance of the memorandum of association, and we respectively
agree to take the number of shares in the capital of the company set opposite our respective
names”
▪ Sign MOA in presence of at least one witness (witness shall also write his particulars)
Printing and signature of MOA & AOA
MOA and Articles shall be
▪ Printed
▪ Divided into paragraph numbered consecutively
▪ Dated
▪ Signed by each subscribers giving following details in presence of a witness (who shall
attest signature and add his particulars also)
- Present Name in full
- Occupation
- Nationality
- Usual residential Address
- Others particulars as may be prescribed
Every Co, upon request and payment of a prescribed amount by its member, shall supply within
14 days a copy of MOA & AOA of the company.
Borrowing powers to be part of memorandum
MOA & AOA is deemed to include (implied) power to enter into any arrangement for obtaining
loans, advances, finances or credit, and to issue other securities not based on interest for raising
resources from a scheduled bank, a financial institution or general public
Prohibited Names for a Company
▪ Containing word or expression notified by SECP;
▪ Inappropriate, undesirable or deceptive (in the opinion of SECP)
▪ Designed to exploit or offend religious sentiments of people.
▪ Identical with name of a company already registered
▪ Nearly resembling that name of a company already registered
Names which require prior approval of SECP
Prior approval of SECP required if proposed name suggest
▪ Patronage of any, past/present, Pakistani/foreign, Head of State
▪ Any connection with Federal Govt. or Provincial Govt. or any department or authority of
any such Government;
▪ Any connection with any corporation set up by or under any Federal or Provincial law; or
▪ Patronage of, or any connection with, any foreign Government or any international
organization.
▪ Establishing a modaraba management Co or to float a modaraba
▪ Any other business requiring a license from the government
Whenever a question arises as to whether or not the name of a company is in violation of above
provisions, decision of SECP shall be final.
Application for reservation of a name
▪ A person may make an application in specified form and manner with a specified fee, to the
registrar for reservation of any name
▪ Reservation can be made for a period of maximum 60 days.
▪ If it is found that a name was reserved, by furnishing false or incorrect information
- Such reservation shall be cancelled
- The person making application shall be liable to a penalty.
- If the company has been incorporated, it shall be directed to change its name.
▪ If application is refused by registrar, aggrieved person may within 30 days of the order of
refusal prefer an appeal to SECP.
▪ Order of SECP shall be final and shall not be called in question before any court or authority
Rectification of Name
▪ If wrong name selected by Co,
- It may change name with the approval of registrar; and
- It shall change name within 30 days if registrar directs so.
▪ Registrar shall, before issuing direction for change of name, give Co an opportunity of being
heard
▪ If company fails to comply with above direction, registrar may
- Register company under a new name selected by him;
- Issue a certificate of incorporation on change of name; and
- Impose a penalty for non compliance
How a Company can Change its Name
▪ Special Resolution
▪ Approval of registrar.
No approval required if addition or deletion of words “(Private), (SMC-Private), (Limited) or
(Guarantee Limited) or (Unlimited)]
Effect of Change of Name
▪ Registrar shall enter the new name on register in place of old one.
▪ Registrar shall issue a new certificate of incorporation altered to meet the circumstances
▪ Continue to mention former name along with its new name outside every business place
and in all documents (for 90 days from date of issue of new certificate)
▪ Change of name shall not affect the rights & obligations of Co.
▪ Legal proceeding may be continued against Co in new name
Publication of Name
▪ Name and incorporation number of every limited company shall be displayed outside
company’s every office or place of business in a conspicuous position.
▪ Company shall display a certified copy of certificate of incorporation at every place of
business
▪ Name, address of registered office, telephone, fax number, e-mail and website addresses, if
any, shall be mentioned on all documents appeared to be the documents of company.
▪ Level 1 Penalty on company and its officers for not displaying name in manner provided.
▪ Officer shall be personally liable for debt of company if he issue / authorize any document
without mentioning the name of company (unless debt paid by the company itself)
