al-khair suger mills

8/3/2019 Al-Khair Suger Mills

1/5

CORPORATE & BUSINESS LAW

UNIVERSITY OF MANANGEMENT AND TECHNOLOGY

Formation of Al-Khair Suger Mills (Public)

Company

According to James Stephen;A company is an association of many persons who contribute money or

moneys worth to a common stock and employees it in some trade or business and who

share a profit and loss arising there from

Formation of Al-Khair Suger Mills (Public)

The formation of company is possible under four stages that are under as;

y Promotiony Incorporationy Subscriptiony Commencement ofbusiness

PromotionThe promoters do the basic work f or starting a business

weather it is industrial or commercial basis. The promoters prepare certain documents

and comply with the rules stated in the company ordinance 1984.The document are

filed with the provinces registrar.

Name of Promoters:

(1) Mr.Salman Shahid(2) Mr.Amir Shahzad(3) Mr.Arslan(4) Mr.Atif Iftikhar

y Business planning;Promoters discover the ideas and hopes that there are possibilities of

a business. The idea may relate to new or an existing business. The idea is based upon

experience or observation of expert in field of business.

y Analyses of plan;The promoter can prepare estimate about the cost of land, building and

machinery, labour, raw materials and financial basis. The success of business depends upon

careful analyses.

y Seek opinion;The view of the consultants must be given due importance while preparingthe final draft. The success of business is linked with the exact calculations of the business

programme.

y Collecting resources;The promoters can assemble business resources and factors of

production. The promoters make some contracts with the suppliers of raw materials and

machinery.


2/5



y Filing papers;The papers to be filed are;(1) Memorandum of association(2) Article of

association (3) Statutory declaration that legal requirements have been compiled with 4

original copies of treasury challan.

Incorporation stageThe second step for establishment ofAl-Khair Suger mills is to get registration.y Name;

The name of the company is proposed by promoters. The name should be

different from other existing companies like Al-Khair Suger mills. The name must be

suggesting the patronage of any head of state.

y Documents;The documents to be filled are,(1)Listed directors with their consent within 7

days of issue of certificate of incorporation,(2)Notice of situation of company register office

and (3)Prospectus on or before the date of its publication.

yFee charges;The public company shall pay amount of duty on share capital and the

prescribe fee of filling documents. The amounts are paid in a government treasury.

y Certificate;The registrar issues a certificate of registration; it is also called a

certificate of incorporation. Al-Khair Suger mills becomes a legal person from the

date of registration that is 1stMarch 1984.

y Address;After the incorporation the management must inform the registrar in

writing about registered office of company within 28 days.

Subscription stage

A private company can commence business on

receipt of certificate of incorporation however a public company has to fulfill

another requirement of subscription to obtain the certificate of commencement of

business. The subscription stage is connected to following steps.

y A prospectus has been issued inviting the public to subscribe for the shares.A copyof prospectus is submitted to the registrar.

y Where no prospectus has been issued, a statement in lieu of prospectus has beenfiled with the registrar.

y The promoters can make agreement to sell share and debenture before of invitationto general public. The under writer provides guarantee that their share will be soldwithin time period.


3/5



Commencement stageThe commencement stage contains the following points;

y Shares;The shares payable in cash have been allotted. The amount has been raised

by issue of shares for,

1. Purchase of property2. Preliminary expenses3. Money borrowing4. Working capital5. Other expenditure

y Directors;The directors must purchase the shares. Every director is bound to buy at

least one share and who failed to buy share cannot become director.

y Declaration;A declaration is given that all conditions have been completed. It may

be minimum subscription has been collected, the director have paid share money isfull and the amount of subscription cannot be refunded.

y Business certificate;The registrar must satisfy himself that all requirements for the

start of business have been .then he can issue a certificate of commencement of

business.

Legal documents for formation of Al-Khair Suger mills

There are three legal documents for formation of Public limited company that are;

y Memorandum of Association(MOA)y Article ofAssociation(AOA)y Prospectus

Now we discuss every document with details and every requirement has its own

legal existence.

(1) Memorandum of AssociationDefinition (sec.15)

The memorandum of Association is a document which regulates a

companys external activities and constitution and which must be drawn up at theformation of a company

The charter of every company is Memorandum of association and it makes the

relationship between company and general public. In other words we can say the

memorandum of association regulates the external affairs of the company due to this the

shareholders and creditors can know the range of business activities of the public limited

company. The memorandum of association has 6 clauses.


4/5



Clauses of Memorandum of Association;

y Name;The name of a company proposed in this clause. The name should be different

from other existing companies.

y Situation;The place of the company where the company is situated. It also containsthe place where the companys office is established.

y Objects;The purpose of the company is mention in this clause. It always for the

public interest and does not against the public satisfaction.

y Liability;In this clause the liabilities of members are to be written weather it is

limited or not limited.

y Capital;The total capital of the company under which it is registered and all thematter related to sales, purchases, finance and others requirement is done.

y Association;In this clause we enclose that our company is private or public .

(2) Article of Association

Definition (sec.26)

The articles of association are documents that govern the running a company.

Itssets out voting rights meetings, power of the management to the article of association are

the bye-laws of a company

These are the rules to manage the internal affairs of the company and to achieve

objects stated in memorandum .The articles are sub-ordinate to the memorandum of

association. The articles cannot go beyond the scope of the companies ordinance 1984.The

articles regulates the rights of shareholders of a company.Every company is allowed to

manage its own articles under which the company runs over business.

Contents of Article of Association;Now we discuss the contents of Articles of Association these are given below,

y Rights of various classes of share holder.y Alteration of share capital.y General meeting of a company.y Share capital in its division into different classes.y Transfer of share from seller to buyer.y Voting power of members.y Appointment of directors.


5/5



y Power and duties of director.y Disqualification of a director.y Proceeding of the directors meeting.y Filling of vacancies.y Dividend and reserve.y Winding up a company.y Dividends and reserves.y Accounts and their audit.y Notices to be issues by a company.y Indemnity to be paid to company officer or agent.

(3) Prospectus

Definition

Prospectus is a document in visiting the public to buy a new share, stock ordebenture in a public company stating the terms and giving certain information by law

A prospectus is a notice to general about the formation of a new company. A

company tries to attract the people that there is best opportunity for investment in the

shares and debentures. The prospectus includes terms and conditions for the purchase of

shares and debentures. There is an application form in every copy of prospectus. The

investor can apply on this form for purchase of shares or debentures.

Contents of Prospectus;

yMemorandum

y Description of businessy Directors remunerationy Names of managementy Application moneyy Payment to Promotersy Auditors Reporty Interest in Capitaly Interest In Subsidiaries

Statement in Lieu of prospectus:A company having a share capital which does not issue a prospectus on or

with reference to its formation, there has been delivered to the registrar for registration a

statement inlieu of prospectussigned by every person who is names therein as a director

or proposed director of the company or by his agent authorized in writing in the prescribed

form.