COMPANY
LAW
Introduction
to Company Law in Pakistan
Company law is a
regulatory law, it’s not a substantial law that regulates the conduct of
companies. Before the Companies Act 2017, the matters related to companies were
regulated by the Companies Ordinance,
1994. It is believed that the Companies Act, as a sole law can’t entirely deal
with the matters related to the company. Thereby, we have various Acts, rules, and
institutions that are involved in supervising the matters related to the
company. In Pakistan Security Exchange Commission, is a proper institute to
deal with the companies. Security Exchange Ordinance 1971, Security Exchange
Commission of Pakistan Act 1997, Mudarabah Companies Act, Listed Company
Ordinance, Single-member Companies Rules, Companies rules, Companies
Rehabilitation rules, Leasing Company Rules, Non-banking Financing Rules, and
else.
Functions
of Company law
Company law provides an enabling environment
so that they can grow economically according to the social policies. It gives a
minimum standard of business integrity through which we can enhance the
environment of participation and conduct of one businessman against the other
businessman. The law provides a regulatory system that attempts to minimums the
risks for the businessman to secure the capital of the company. One of the most
important functions of law is it provides a proper procedure to appoint the
managers who work as an agent of the company and bind them not to work against
the interest of the company. Also, at
the time of winding up, it gives a clear procedure that ensures the interest of
all the people working in the company.
Definition
of Company
The word company is
derived from “Panis” which means break. Company means eating the bread
together. Corporation word is
interchangeably used for companies but both have differences. The company law
lies at the core of the world’s capitalist system.
According to the theory
of the corporation, it is defined “as an artificial being, invisible,
intangible, and existing only with the contemplation of law by the state and
possesses a legal personality that enables it through its agents and
representative to do things as a natural person. It is an artificial person
whose entire life and character depend on the law that brings it into being.”
A company is an
association of persons united for a common object.
Company with its Artificial personality is created by the law through which it acquire a separate legal entity
with perpetual succession and a common seal.
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