What is a company?
Company is legally an entity apart from its members, capable of rights and duties of its own, and endowed with the potential of perpetual succession. It is an ‘intricate, centralised, economic, administrative structure run by professional managers who hire capital from the investors”. In other words a company means certain persons registered under the Companies Ordinance, 1984.
Kinds of Companies.
With the increasing complexities of the corporate world, companies take on diverse forms with the passage of time. However, the basic two genres of company remain as follows:
Private Limited Company
Any one or more persons may by subscribing to a memorandum of association for a lawful purpose may form a private company. (The Companies Ordinance, 1984)
Company as a mode of business-Advantage.
Where greater mobilization of capital is required, which the resources of a few persons cannot provide, the formation of a company is advisable as this is the only form of business organization which offers the privilege of limiting of members’ liability for debts of the company.
Company is legally an entity apart from its members, capable of rights and duties of its own, and endowed with the potential of perpetual succession. It is an ‘intricate, centralised, economic, administrative structure run by professional managers who hire capital from the investors”. In other words a company means certain persons registered under the Companies Ordinance, 1984.
The Companies Ordinance, 1984.
This is the most potent statute dealing with the company registration process in Pakistan. Its primary purpose is the promotion of investment and development of economy of Pakistan, and also the healthy growth of the corporate enterprises and the protection of investors and creditors.Kinds of Companies.
With the increasing complexities of the corporate world, companies take on diverse forms with the passage of time. However, the basic two genres of company remain as follows:
Private Limited Company
Any one or more persons may by subscribing to a memorandum of association for a lawful purpose may form a private company. (The Companies Ordinance, 1984)
Public Limited Company
Any three or more persons may form a public limited company, and any seven or more persons may form a listed public company in the same manner and purpose. (The Companies Ordinance, 1984)
Both the companies stated above might either be limited by share, or guarantee, or unlimited.Any three or more persons may form a public limited company, and any seven or more persons may form a listed public company in the same manner and purpose. (The Companies Ordinance, 1984)
Company as a mode of business-Advantage.
Where greater mobilization of capital is required, which the resources of a few persons cannot provide, the formation of a company is advisable as this is the only form of business organization which offers the privilege of limiting of members’ liability for debts of the company.
Why is it important to register a company?
The Companies Ordinance, 1984 strictly lays down that no company shall be formed for the acquisition of gain through its mode of business unless it is registered as a company under the ‘Ordinance’. Hence any person who shall do so in contravention of the provisions of the ‘Ordinance’ shall be liable for the payment of fine which may extend to Rs. 5000 and also for all the liabilities incurred in the business.
(Source: SMEDA)The Companies Ordinance, 1984 strictly lays down that no company shall be formed for the acquisition of gain through its mode of business unless it is registered as a company under the ‘Ordinance’. Hence any person who shall do so in contravention of the provisions of the ‘Ordinance’ shall be liable for the payment of fine which may extend to Rs. 5000 and also for all the liabilities incurred in the business.
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