E15 CLS Course 23.04

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Syllabus: Paper E15 Corporate Laws

Compiled By: Muhammad Adnan Arshad Walana [23.04.2009]

COURSE OUTLINES: APPLICABLE FOR SUMMER / JUNE, 2009 & ONWARDS

PAPER E 15: CORPORATE LAWS (CLS) - (100 MARKS)

MODULE E: C.A. FINAL EXAMINATION (ICAP)

INTRODUCTION OF THE PAPER:

- Corporate Matters & Secretarial Practices:

The syllabus aims to provide the knowledge and understanding of corporate and other relevant

laws, rules and regulations and to familiarize with the Secretarial Practices including the knowledge

of handling various matters usually expected to be performed by the Company Secretary of a

corporate entity. Case Studies / Scenario-Based Questions in addition to Descriptive Questions will

be set in the examination.

- The Companies Ordinance, 1984:

The CA-Final Examinees are expected to possess detailed knowledge of “The Companies Ordinance,

1984” over and above what they have learnt at the CA-Intermediate Stage. Topics examined at the

CA-Intermediate Stage may or may not be directly re-examined here, however, examinees would

need to utilize knowledge and skills learnt earlier.

- Various Rules under “The Companies Ordinance, 1984”:

The knowledge required for Companies Rules would also be comprehensive.

- Other Laws & Regulations:

Only general knowledge would suffice.

INDICATIVE GRID:

SYLLABUS CONTENT AREAWEIGHTAGE

(MARKS)

THE COMPANIES ORDINANCE, 1984:

1. Practical aspects in respect of areas of “The Companies Ordinance, 1984”

covered at Module D examination in D10-Company Law (CLW) paper.

2. “The Companies Ordinance, 1984” from section 261 onwards.

3. Second Schedule. [Part-I, II & III]

40

4. Various Rules under “The Companies Ordinance, 1984” 30

5. Secretarial Practices 15

6. Other laws and regulations 15

TOTAL 100

NOTE: The weightages given above are for guidance purposes only and deviations in setting of

papers may be expected.

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UPDATED (REVISED) CONTENTS OF THE SYLLABUS OF CORPORATE LAWS:

THE COMPANIES ORDINANCE, 1984: (40 MARKS)

1. Areas of “The Companies Ordinance, 1984” covered at Module D Examination in

D10-Company Law (CLW) Paper: PART-I (section 1) – PART-VII (section 260)]

In E-15: Corporate Laws (CLS) paper at CA-Final level, students are to have a more in-depth

knowledge and understanding of those parts of “The Companies Ordinance, 1984” which were

covered in the D10-Company Law (CLW) Paper at Module D, however, the emphasis of testing at

the CA-Final Examination level would be;

- application of those provisions from a practical viewpoint; &

- testing would focus on the level of understanding of those provisions and their application.

2. Other specialized and advanced areas of “The Companies Ordinance, 1984”:

SYLLABUS CONTENT

AREA

PART OF

C.O., 1984

THE COMPANIES

ORDINANCE, 1984SECTION

2.1 PART-VIII

Management and Administration:

and also including especially;

- Investigation and related matters

(Section 263 – 282)- Non Banking Finance Companies

(NBFC) Provisions as to

Establishment and Regulation of

NBFC

(Section 282A – 282N)

142 – 28

2.2 PART-IXArbitration, arrangements and

reconstruction283 – 28

2.3 PART-XPrevention of oppression and

mismanagement290 – 29

2.4 WINDING-UP OF COMPANIES:

2.4.1 PART-XI WINDING-UP

2.4.1.1 Preliminary 207

2.4.1.2 Winding-up by court

2.4.1.2.1Cases in which company may be

wound-up by court305 – 30

2.4.1.2.2 Petition for winding-up 309 – 31

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2.4.1.2.3 Commencement of winding-up 311

2.4.1.2.4 Official liquidators

* (Students should be familiar with

the contents of statement of affairs &

report of liquidator as set out in

section 328 & 329)

321 – 33

333, 334, 3

337

2.4.1.2.5 Powers of court 339 – 34346 – 35

2.4.1.2.6 Enforcement of orders 355 – 35

2.4.1.3 Voluntary Winding-Up

2.4.1.3.1 Resolutions for, & commencement of

winding-up358 – 35

2.4.1.3.2 Consequences of voluntary winding-

up360 – 36

2.4.1.3.3 Declaration of solvency 362

2.4.1.3.4 Provisions applicable to members’voluntary winding-up 363 – 37

2.4.1.3.5 Provisions applicable to creditors’

voluntary winding-up372 – 38

2.4.1.3.6 Provisions applicable to every

voluntary winding-up383 – 39

2.4.1.3.7 Winding-up subject to supervision of

court396 – 40

2.4.1.4 Provisions applicable to every mode of winding-up

2.4.1.4.1 Status of companies being wound-up 402

2.4.1.4.2 Proof & ranking of claims, etc. 430 – 40

2.4.1.4.3 Supplementary provisions as to

winding-up

421 – 42

431 – 43

2.4.2 PART-XIIIWINDING-UP OF

UNREGISTERED COMPANIES 443 – 44

2.5 Companies established outside Pakistan

2.5.1Provisions as to establishment of

places of business in Pakistan450 – 46

2.5.2

PART-XIV

Prospectus 461 – 46

2.6 PART-XV Registration office and fees 468 – 46

2.7 General

2.7.1PART-XVI

Legal proceedings, offences, etc. 494 – 49

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3. SECOND SCHEDULE OF THE COMPANIES ORDINANCE, 1984

Salient features of disclosure requirements for prospectus or statement in lieu of prospectus an

understanding of the reports and certificates to be included in the prospectus

2.8 (SEE SECTIONS 45, 53 AND 69)

2.8.1 PART-I Matters to be specified in prospectusand reports to be set out therein

1, 2 & 3

2.8.2

PART-II Form of statement in lieu of

prospectus to be delivered to

registrar by a company which does

not issue a prospectus or which does

not go to allotment on a prospectus

issued, and reports to be set out

therein

1 & 2

2.8.3

PART-III Form of statement in lieu of

prospectus to be delivered toregistrar by a private company on

becoming a public company and

reports to be set out therein

1, 2 & 3

4. Various Rules under “The Companies Ordinance, 1984”: (30 MARKS)

4.1 The Companies Rules, 1985;

- Knowledge of only Explanatory Provisions of The Companies Rules, 1985 isrequired

- Knowledge of the contents of the Forms is not expected

4.2 Capital Issues – The rules for issue of capital by companies, premium on shares, issue of

shares for consideration other than cash and related aspects, covered by;

4.2.1 The Companies (Issue of Capital) Rules, 1996

[Covered in section 89 & 91 of The Companies Ordinance, 1984]; &

4.2.2 Stock Exchange Rules

[Covered in Listing Regulations of Karachi Stock Exchange (Guarantee) Limited,

1990]

4.3 Companies (Appointment of Legal Advisors) Rules, 1975

4.4 Companies (Buy-back of Shares) Rules, 1999

[Covered in section 95A of The Companies Ordinance, 1984]

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4.5 Companies' Share Capital (Variation in Rights and Privileges) Rules, 2000

[Covered in section 91 of The Companies Ordinance, 1984]

4.6 NBFC Rules and Regulations: – (REVISED)

The topic of NBFC Rules and Regulations in the Corporate Laws syllabus will cover thefollowing laws only:

4.6.1 The Companies Ordinance, 1984 - Non Banking Finance Companies (NBFC)

Provisions as to Establishment and Regulation of NBFC

Part-VIII Section 282A to Section 282N

4.6.2 The Non-Banking Finance Companies (Establishment and Regulations) Rules, 2003

4.6.3 Only “Regulation 25” of the Non-Banking Finance Companies and Notified Entities

Regulations, 2008 – (NEW)

4.6.4 Following two (2) schedules of the Non-Banking Finance Companies and Notified

Entities Regulations, 2008;

4.6.4.1 Schedule-IX Fit and Proper Criteria

4.6.4.2 Schedule-X Long, Medium and Short Term Financing

Facilities

4. Secretarial Practices: (15 MARKS)

4.1 Floatation / Issuance of shares and securities including;

- prospectus, offer for sale and convertible securities, stock exchange listing rules,underwriting, brokerage, etc.

- discount and premium on shares

- application and allotment of shares

- issue of share certificates and bonus and right shares

- transfer and transmission of shares of companies

- investigation &

- dividend

4.1.1 Under the Companies Ordinance, 1984;

- filing requirements; &

- maintenance of statutory books and registers.

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4.1.2 Meetings of shareholders and directors and all proceedings thereto, including;

- notices

- agenda

- quorum

- voting- poll

- proxies

- resolutions and

- minutes of meetings

4.2 The Securities and Exchange Commission of Pakistan (SECP) Act, 1997

- Functions of Securities and Exchange Commission of Pakistan (SECP); &

- Responsibilities of Securities and Exchange Commission of Pakistan (SECP).

5. Other Laws and Regulations: (15 MARKS)

5.1 Foreign Exchange (Forex) Regulations – Foreign Exchange Manual (FEM - 8th Edition):

5.1.1 Chapter XIX Loans, overdrafts and guarantees etc.

Part A: Rupee loans

Foreign Exchange (Forex) Regulations relating to;

- definition of foreign controlled companies (FCCs)

- provisions for general permission for lending to foreigncontrolled companies (FCCs) for;

- working capital

- local borrowings by foreign controlled companies for

capital expenditure

Part B: Foreign Private Loans

- Private foreign currency loans

- Repatriable foreign currency loans by foreign controlled

companies (FCCs) for meeting working capital requirements,

- Foreign currency loans by Pakistani firms and companies

functioning in Pakistan on

repatriable basis

non-repatriable basis

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5.1.2 Chapter XX Securities

Knowledge and application of provisions relating to rules and

regulations governing;

- acquisition and holding of foreign securities

- issue, transfer and export of Pakistani securities to non-residents

- general exemption from the restriction on transfer and issue

of Pakistani securities to non-residents

- procedure for issue of shares to non-residents

- trading of quoted shares by non-residents, and

- special instructions regarding shares transferred under the

Central Depository System – CDS of the Central Depository

Company (CDC).

5.2 Stock Exchange Listing Rules and Guidelines

[Listing Regulations of Karachi Stock Exchange (Guarantee) Limited, 1990] – especially those

relating to;

5.2.1 Secretarial Matters

5.2.2 Public issue of shares

5.2.3 Code of Corporate Governance (CCG)

5.2.4 Transfer Pricing

5.3 Laws governing certain specialized institutions:

5.3.1 Banking Companies Ordinance, 1962

[mainly covered in sections 34, 35, 36, 37 & 38 of BCO, 1962]

Sections pertaining to;

- audit and accounts

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5.3.2 The Central Depository Company (Pakistan) Limited:

5.3.2.1 The Central Depositories Act, 1997

5.3.2.2 Central Depository Companies (Establishment and Regulation) Rules,

1996 – Understanding of provisions relating to;

- Central Depository System (CDS); and- Effect of the Central Depository on provisions of the

Companies Ordinance, 1984 relating to inter-alia;

- sending of notices to members

- registration of transfers

- payment of dividend

- maintenance of register of members

- issue of bonus and right shares and effect on the

rights of members

5.3.3 Laws relating to “Modaraba Companies and Modarabas”:

5.3.3.1 Modaraba Companies and Modarabas (Floatation and Control)

Ordinance, 1980

Provisions relating to the following:

- Definitions (Section 2)

- Registration of Modaraba Companies (Section 4, 5 & 6)

- Provisions applicable to Modaraba (Section 7, 8, 9, 10, 11, 12,

13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 33, 37, 41 and 42)

5.3.3.2 Modaraba Companies and Modaraba Rules, 1981

- Rules: 2, 3, 4, 7, 8, 9, 10, 11, 12, 13, 16, 17, 18, 19, 20, 20A, 20B,23, 25, 26, 27, 28

- Schedules: - First Schedule;

- Form No. 1 (including annexures)

- Form No. 9 (including annexures)

- Form, No. 11 (including annexures)

- Third Schedule;

- Fourth Schedule;

(Salient features of matter to be specified in

prospectus and reports to be set out therein)

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5.3.4 Laws relating to “Insurance Companies” in Pakistan:

5.3.4.1 The Insurance Ordinance, 2000

[Covered mainly in sections 45, 46, 47, 48, 49, 51 and 52]

Provisions relating to;

- statutory and special audits, &- maintenance of accounts

5.3.4.2 Securities and Exchange Commission (Insurance) Rules, 2002

including;

- regulations; &

- format accounts

5.3.4.3 Code of Corporate Governance (CCG);

Broad understanding of CCG for;

- listed / quoted insurance companies; &

- unlisted / unquoted insurance companies

5.3.5 Laws relating to “Securities and Exchange”:

5.3.5.1 The Securities and Exchange Ordinance 1969

5.3.5.2 The Securities and Exchange Rules, 1971

Provisions pertaining to;

- issuance of shares and securities to the general public

(mainly section 9); &

- insider trading (sections 15, 15A, 15B)

5.3.6 Laws relating to “Competition Commission of Pakistan (CCP)” – Competition Law:5.3.6.1 Competition Ordinance, 2007

1. Chapter-I: Preliminary

2. Chapter-II: Prohibition of abuse of dominant position, certain

agreements, deceptive marketing practices and

approval of mergers

3. Chapter-IV: Functions and powers of the commission

4. Chapter-V: Penalties and appeals

5.3.6.2 Competition (Merger Control) Regulations, 2007 (excluding schedules)

5.3.6.3 Competition (Leniency) Regulations, 2007

5.3.7 Laws relating to Listed Companies (Substantial Acquisition of Voting Shares and

Takeover) : – (REVISED)

5.3.7.1 Listed Companies (Substantial Acquisition of Voting Shares and

Takeover) Ordinance, 2002

5.3.7.2 Listed Companies (Substantial Acquisition of Voting Shares and

Takeover) Regulations, 2008 – (NEW)

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5.4 Rules and regulations framed by the Federal Government from time to time, as may be

specifically notified by “The Institute of Chartered Accountants of Pakistan (ICAP)” for inclusion in

the syllabus.

* NOTE: Where specific reference to an Act, Ordinance, Rules, Regulations, Guidelines or SRO

gazette notification is given it is to be assumed that it covers any subsequent

amendments that may be made therein from time to time.

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