Chapter 2 Flashcards

1
Q

What is the Memorandum of Association?

A

: It is the constitution of a company that includes clauses like Name, Place, Principal Line of Business, Liability, and Capital.

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2
Q

What are the main clauses required in the Memorandum of Association?

A

Name Clause, Registered Office Clause, Principal Line of Business Clause, Liability Clause, Authorized Capital Clause, and Undertaking or Subscription Clause.

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3
Q

What does the Name Clause state?

A

The name of the company, including words like “Limited,” “(Private) Limited,” “(Guarantee) Limited,” or “(SMC-Private).”

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4
Q

What information is required in the Registered Office Clause?

A

A: The province or region where the company’s registered office is situated.

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5
Q

What is the Principal Line of Business Clause?

A

A: It states the main business activities of the company, excluding any restricted activities.

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6
Q

What does the Liability Clause specify?

A

It defines the liabilities of members, whether limited by shares, guarantee, or unlimited.

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7
Q

What is outlined in the Authorized Capital Clause?

A

A: The maximum share capital the company can issue and the division of capital into shares of fixed nominal value.

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8
Q

Q: What is included in the Undertaking or Subscription Clause?
.

A

A: An undertaking to form the company and to comply with its memorandum

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9
Q

Q: What is required for printing and signing the Memorandum of Association?

A

A: It must be printed, signed by subscribers, and include their personal details and a witness.

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10
Q

When is prior approval needed for a company name?
.

A

A: If the name implies connection with the government, religious exploitation, or any restricted activity

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11
Q

What is prohibited when selecting a company’s name?

A

Names that are identical or closely resemble existing companies, are inappropriate, exploit religious feelings, or require prior approval by the Commission.

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12
Q

What are examples of names requiring prior approval from the Commission?

A

A:
• Names implying patronage with the Head of State or Government.
• Connection with Federal or Provincial Government or statutory bodies.
• Association with international organizations or foreign governments.
• Names implying Modaraba management or restricted business.

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13
Q

What happens if the name of the company violates the Registrar’s provisions?

A

The decision of the Commission is final regarding whether the name violates the rules.

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14
Q

What does the Borrowing Power of the Company entail?

A

The Memorandum and Articles allow the company to borrow money and issue other securities not based on interest.

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15
Q

What must each subscriber include in the Authorized Capital Clause?

A

Their agreement to take at least one share, with the number of shares opposite their name.

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16
Q

What must the Principal Line of Business Clause always match?

A

It must match the name of the company

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17
Q

What is required when subscribers sign the Memorandum?

A

Names, occupations, nationality, residential addresses, and other prescribed details.

18
Q

What does the Liability Clause cover for companies limited by guarantee?

A

It specifies the amount members agree to contribute at the time of winding up.

19
Q

What are the implications of the Undertaking or Subscription Clause?

A

Subscribers agree to comply with the memorandum and take shares in the company.

20
Q

Can existing companies continue with their old memorandum?

A

Yes, existing companies can continue with their existing memorandum unless changes are required.

21
Q

What does the Name Clause in the Memorandum of Association include?

A

The name of the company, including terms like “Limited,” “(Private) Limited,” “(Guarantee) Limited,” or “(SMC-Private).”

22
Q

What is the purpose of the Principal Line of Business Clause?

A

A: It defines the company’s main business activities, ensuring they are not prohibited or restricted (require approval

23
Q

What does the Liability Clause detail?

A

A: It outlines the liabilities of members, whether limited by shares, guarantee, or unlimited, and the amount they agree to contribute at winding up.

24
Q

What is stated in the Authorized Capital Clause

A

The maximum share capital the company can issue and its division into shares of fixed nominal value.

25
How must the Memorandum of Association be printed and signed?
A: It must be printed, divided into numbered paragraphs, signed by subscribers, and include their details and a witness’s signature.
26
What powers are deemed to the company through the Memorandum and Articles?
A: The power to borrow money and issue securities not based on interest.
27
What names are prohibited for a company under the Registrar’s opinion?
: Names identical to or resembling an existing company, inappropriate, religiously offensive, deceptive, or restricted.
28
What are examples of names requiring prior approval by the Commission?
Names suggesting: • Patronage with the Head of State. • Connection with the Government or statutory bodies. • Modaraba management. • Foreign or international organizations.
29
For how long must a company mention its old name along with its new name after a name change? .
A: For 90 days: • Outside every office or place of business. • On every document or notice of the company
30
Does a company’s change of name affect its rights and liabilities?
A: No, the change of name does not affect: • Any rights or liabilities of the company. • Any legal proceedings by or against the company.
31
What must every company display outside its registered office or place of business?
A: • The name of the company. • The incorporation number. • These details must be displayed in English or Urdu.
32
Where must a certified copy of the certificate of incorporation be displayed? .
A: At every place where the company conducts business
33
What additional details must a company include on all official documents or notices?
• The address of its registered office. • Email address. • Website address (if applicable
34
What happens to ongoing legal proceedings if a company changes its name?
A: Legal proceedings continue unaffected by the name change
35
In what languages must a company’s name and incorporation number be displayed?
A: In English or Urdu.
36
Where should the company name and incorporation number be displayed?
A: • Outside the registered office. • Outside every office or place of business.
37
Does a company need to republish its legal documents after a name change?
A: No, a name change does not affect any ongoing legal documents, rights, or liabilities of the company.
38
What must be included in the company’s notices and official documents after a name change?
A: • The new name of the company. • The address of the regist ered office. • Contact information, such as email and website addresses.
39
Why is it necessary to mention the old name along with the new name for 90 days?
A: To ensure transparency and avoid confusion for stakeholders during the transition period.
40
What document must be displayed prominently at business locations? .
A: A certified copy of the certificate of incorporation
41
What is the significance of displaying a company’s incorporation number?
It ensures authenticity and compliance with legal requirements
42
Is it mandatory for a company’s name to be visible to the public?
A: Yes, it must be displayed prominently outside all offices and places of business.