DEFINITON

SEVENTH SCHEDULE

Enactments repealed 420

EIGHTH SCHEDULE

Amendment of Ordinance. XVII of 1969 421

Companies Ordinance, 1984

1

THE

COMPANIES ORDINANCE

(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 the

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 fifth 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) "articles" 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;

Companies Ordinance, 1984

2

(2) "associated companies" and "associated undertakings" mean any two or

more companies or undertakings, or a company and an 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 twenty 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 indirectly, holds or controls shares carrying not less

than twenty per cent of 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

company or undertaking:

Provided that shares 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

Companies Ordinance, 1984

3

Government or a Provincial Government; 1[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;

2 [(3) “Authority” means 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;

3 [(5A) “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 4[Commission] under section 32A 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

1 Inserted through Central Depository Act.

2 section 11 and subsection (3) to (7) of section 12 of the Ordinance stand repealed and all reference to

'Authority' and Corporate Law Authority' deemed to mean and refer to the 'Commission' and 'Securities and

Exchange Commission of Pakistan' in terms of section 43 (a) of SEC Act, 1997.

3 Inserted through Central Depository Act.

4 Substituted word ‘Authority’, wherever appearing by Companies (Amendment) Ordinance, 2002

Companies Ordinance, 1984

4

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;

1[(6-A)“Commission” means the Securities and Exchange Commission of

Pakistan established under section 3 of the Securities and Exchange

Commission of Pakistan Act, 1997 (XLII of 1997);]

(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 liability 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 by the Banking & Financial Services (Amendment of Laws) Ordinance, LVII of

1984;

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

(12) "debenture" includes debenture stock, bonds, 2[term finance certificate]

and any other securities, other than a share, of a company, whether

constituting a charge of 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;

1 Inserted by Companies (Amendment) Ordinance, 2002.

2 Subs. by Banking & Financial Services (Amendment of Laws) Ordinance, LVII of 1984.

Companies Ordinance, 1984

5

(15) "existing company" means a company formed and registered under any

previous Companies Act;

1[(15A)“financial institution” includes:–

(a) a company or an institution whether established under any special

enactment and operating within or outside Pakistan which

transacts the business of banking or any associated or ancillary

business through its branches;

(b) a modaraba, leasing company, investment bank, venture capital

company, financing company, housing finance company, a nonbanking

finance company; and

(c) such other institution or company authorised by law to undertake

any similar business, 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 as 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

1 Substituted by Companies (Amendment) Ordinance, 2002.

Companies Ordinance, 1984

6

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

provision of any previous Companies Act or of this Ordinance;

(23) "modaraba" and "modaraba company" have the same meaning as in the

modaraba 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;

1 [(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 respect 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

1 Clause (25), Subs. by the Banking & Financial Services (Amendment of Laws) Ordinance, LVII of 1984

Companies Ordinance, 1984

7

1866), the Indian Companies Act, 1882, (VI of 1882) the Indian

Companies Act 1913 (VII of 1913), or any law corresponding to any of

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 public for the subscription or purchase of 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;

1[(30A)"redeemable capital" includes finance obtained on the basis of

participation terms certificate (PTC), musharika certificate, terms

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

1 Clause (30-A) Ins. by the Banking & Financial Services (Amendment of Laws) Ordinance, LVII of 1984.

Companies Ordinance, 1984

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of such instrument or certificate or such other certificate or instrument

as the Federal Government may, by notification in the official Gazette,

specify for the purpose;]

(31) "registrar" 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;

1[(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" means a 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 as

a special resolution at a meeting of which not less then 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);

1 Clause (34) Subs. by the Banking & Financial Services (Amendment of Laws) Ordinance, LVII of 1984.

Companies Ordinance, 1984

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(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 by the Banking & Financial Services (Amendment of Laws) Ordinance, LVII of

1984.

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

this Ordinance means the coming into force of that provision by virtue of a notification

under sub-section (3) of section 1.

3. Meaning of "subsidiary" and "holding company".- (1) For

purposes of this Ordinance, a company or body corporate shall be deemed to be a

subsidiary of another if—

(a) that other 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;

1[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 if, 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

1 Inserted through Central Depository Act.

Companies Ordinance, 1984

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(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 Commission 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 this 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 or 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 this Ordinance, become or be void, as the case

may be.

Companies Ordinance, 1984