•Ultra vires and indoor management
•Difference between Memorandum of
Association and Articles of Association
Company name: Al Meezan Investment
Date of inauguration: October 1997
Registered Capital: Rs. 721 million
Paid up Capital: Rs. 7 billion
Par value: Rs. 10 per share
Market price: Rs 15.73 per share
Liability: the shareholders have a limited
Last year’s liability amounted Rs.
Al Meezan Investment Bank
Objectives: Meezan Bank aims to fulfill its
prime objective of providing customers
accessibility and convenience, within an
atmosphere and culture of dedicated
service and recognition of their needs.
Vision: Establish Islamic banking as
banking of first choice to facilitate the
implementation of an equitable economic
system, providing a strong foundation for
establishing a fair and just society for
Al Meezan Investment Bank
The Board of Directors of Meezan Bank comprises
H. E. Sheikh Ebrahim Bin Khalifa AlKhalifa (Chairman)
Abdul lateef A. Al-Asfour
Rana Ahmed Humayun
Riyadh S. A. A. Edress
Mohammed Azzaroog Rajab
Alaa A. Al-Sarawi
Mohammad Abdul Aleem
Irfan Siddiqui (President & CEO)
Ariful Islam (Deputy CEO)
A sole proprietorship or partnership firm can be
formed to carry out its business even without any
But a company can not be formed or permitted to
run its business without registration. In fact, a
company comes into existence only when it is
registered with the Registrar of Companies.
For this purpose the promoter has to take the steps
to create the three basic legal documents for the
company in order to get it registered
Basic Legal documents
After getting the name approved the promoter makes an application to
the Registrar of Companies of the State in which the Registered
Office of the company is to be situated for registration of the company.
The application for registration must be accompanied by the following
(i) Memorandum of Association (MOA): It defines the objectives of
the company and Incorporation.
There are six main clauses in MOA which are as follows:
Head office clause
The object of the memorandum of the
company contains the object for which the
company is formed. An act of the company
must not be beyond the object clause,
otherwise it will be ultra vires and therefore
void and cannot be ratified even if all the
members wish to ratify it this is called the
doctrine of ultra vires .
Consequences of ultra vires
Personal liability of director
Breach of warranty and authority
Consequences of borrowing
Identification and tracing
ULTRA VIRES PROPERTY
ULTRA VIRES CONTRACTS
The Doctrine of indoor management is a presumption on
the part of the people dealing with the company such as the
shareholders that the internal requirements with regard to
the articles of association and memorandum of association
have been complied with.
The doctrine of indoor management helps in protection of
external members from the company and states that the
people are entitled to presume that the internal proceedings
are as per the documents submitted with the registrar of
They are not allowed to go into the procedural aspect, such
as the fact that the internal proceedings might not happen
regularly, or what are the proceedings before the directors, in
an extraordinary general meeting.
ROYAL BRITISH BANK
FACTS OF THE CASE ARE:
The Articles empowered the Directors to borrow money
provided they were authorized by a Resolution passed at the
General Meeting of the Co.
POINT DECIDED IS:
The outsiders dealing with the Co. are entitled to presume
that as far as the internal management of the Co. is
concerned, everything has been regularly done.
“DOCTRINE OF INDOOR
is also known as
“ RULE IN ROYAL BRITISH
BANK Vs TURQUAND”
DOCTRINE OF INDOOR
“Persons transacting business with the Co. are deemed
to have notice of what they would have discovered by
making a search at the office of the Registrar of Co.’s,
and they would be stopped from asserting that they had
not read the documents. But such persons are not
deemed to have notice of, nor are they under a duty to
inquire into the internal proceedings of a Co. . Thus an
outsider is presumed to know the Constitution of a Co.,
but not what may or may not have taken place within the
doors that are closed to him.”
EXCEPTIONS TO THE DOCTRINE OF
KNOWLEDGE OF IRREGULARITY
NEGLIGENCE ON THE PART OF THE OUTSIDER
NO KNOWLEDGE OF ARTICLES
ACTS OUTSIDE APPARENT AUTHORITY
GREAT FINGALL Ltd.
LORD LOREBURN observed of the case:
“It is quite true that persons dealing with limited liability
Co.’s are not bound to inquire into their indoor mgt. &
will not be affected by irregularities of which they have
no notice. But this doctrine, which is well established,
applies only to irregularities that otherwise might affect a
genuine transaction. It can’t apply to a FORGERY”.
Basic legal documents
Articles of Association (AOA). It contains the rules
and regulations regarding the internal
management of the company. It must be properly
stamped, duly signed by the signatories to the
Memorandum of Association and witnessed.
(iii) Prospectus: A formal legal document, which is
required by and filed with the Securities and
Exchange Commission, that provides details about
an investment offering for sale to the public. A
prospectus should contain the facts that an
investor needs to make an informed investment
1) Articles of Association of a company contain the rules and
Regulations relating to the Management of its internal Affairs.
2) It defines the rights, powers and duties of the Management.
3) It must not contain anything which is against the memorandum of
association or against the companies Act or Public policy.
4) A public company limited by shares may Register its own Articles
of Association or it may adopt Table A .
5) A company limited by Guarantee with out having share capital
may file its own Articles or may adopt Table C.
6) The Articles of Association must be printed, divided into
paragraphs, numbered consecutively and signed by each signatory
to the MOA in the presence of at least one attesting witness.
The articles of a company must
contain the following restrictions.
Restrict the right to transfer shares.
Limit the number of members to fifty.
Prohibit any invitation to the public to subscribe for any
shares in, or debentures of, the Company.
Allawasaya Textile & Finishing
Textile and Finishing Mills
Limited becomes a truly professional
organization, achieve higher
quality standards, utilize maximum
capacity, capture expansion
opportunities and become a least cost
operator amongst its competitors
Allawasaya Textile & Finishing
BOARD OF DIRECTORS
1. Mian Muhammad Jamil - Chairman
2. Mian Tanvir Ahmad Sheikh - Chief Executive
3. Mrs. Nusrat Jamil - Director
4. Mian Anis Ahmad Sheikh - Director
5. Mian Sarfraz Ahmad Sheikh - Director
6. Mian Tauqir Ahmad Sheikh - Director
7. Mian Muhammad Bilal Ahmad Sheikh - Director
8. Mian Muhammad Alamgir Jamil Khan – Director
equity and liabilities
,incorporated in31stMarch 1958
Contents in the Articles of
Adoption of preliminary contracts.
Number and value of shares
Allotment of shares
Calls on shares
Transfer of shares
Forfeiture,reissue,surrender of shares
Alteration of share capital
Conversion of shares in to stocks
Meetings and proceedings
Voting rights , proxies and polls
Appointment , Remmunaration,etc of Directors
Dividend and Reserves
Accounts and audit
Procedure of winding up
Seal of the company
A prospectus is thus any document which invites the public
to provide funds to the company bye law of deposits or
subscriptions to its shares and debentures.
It is a valuable document containing important details about
It should be duly signed by the company.
Saudi pak leasing
Saudi Pak Leasing Company Limited
(formerly Standard Chartered
Merchantile Leasing Company Limited)
was incorporated in January 1991.
The fundamental objective of Saudi Pak
Leasing Company Limited (SAUDI PAK)
is to contribute towards capital formation
in the economy through extending lease
facilities, term financing, advisory &
arrangement services and debt
swapping, thereby supporting the growth
of credit industry
To become industry leader by offering
unique business solutions to the
customers driven by a cohesive team of
CEO and BOD
Mr. Ahsanullah Khan (CEO)
It has 6 BOD,S
Mr. Muhammad Iqbal Hussain
Mr. Farhan Malik (Vice Chairman)
Mr. Muhammad Tariq Masood (Director)
Ms. Parveen A. Malik (Director)
Mr. Shoaib Ahmed Khan (Director)
Mr. Arsalan I. Khan (Director
Earnings per share
Important points of Prospectus
It is an invitation to the public to subscribe to the shares and
debentures of the company.
It informs public about the company and stimulates people to
invest money in the company.
It provides an authentic record of the terms and conditions
on which shares and debentures have been issued.
It identifies the persons who can be held responsible for any
untrue or incorrect statements made in it.
It reflects the business policies and programmes of the
It helps the investors to take investment decisions.
Contents of the prospectus
Name of the company
Address of the Registered office.
Nature and objects of business
History of the company
Particulars about Underwriters,auditors,brokers,bankers
Date of opening and closing subscription list
Name of stock exchanges where applications for listing
has been made.
Information about material contracts with managerial
Consent of managerial personnel
Management perception of risk factors.
Statutory or other information.
Types of prospectus
Shelf prospectus: It is a prospectus issued by
public financial institutions like public sector bank
and scheduled bank
Red -herring Prospectus: It means a prospectus
which does not contain full particulars on price of
the securities offered and their number. It is issued
by companies which raise capital through the book
Sitara Chemical Industries Ltd
601-602 business centre,
Mumtaz hasan road Karachi-74000
SCIL was incorporated in 1981 and began
producing caustic soda in 1985, initially at a rate of 30 metric
tones Caustic a day. The plant’s capacity was gradually
increased over years to current level of 610 metric tones a
day. In addition, various by-product facilities have been
added and expanded from time to time to cope with growing
demand. Company entered into Textile Spinning Business in
1995. Its specialty chemicals and export division was
established in 2001 and agric chemicals division in 2003.
Sitara Chemical Industries Ltd
Objectives: Continuing growth and diversification for bottom line
results with risk well contained.
Strive to develop and employ innovative technological solutions to
add value to business with progressive and proactive approach.
Mr; mohammad Adrees
Board Of directors
Haji Bashir Ahmed(chairman)
Mr: Mohamma adrees (CEO)
Mr: mohammad Anis
Mr: Imran Ghafoor
Mr: haseeb Ahmed
Mr: Mohammad Khalil
Mr: Ijaz hussain
Statement in lieu of prospectus
The public limited companies, which are yet to
obtain the certificate of commencement of business,
without filing of business, require the SLP
(Statement in lieu of prospectus). It must be filed
when a Private company becomes a Public
A public company issue this to the Registrar of
Companies at least three days before the allotment
Minimum amt of money from the proposed issue of shares
If the minimum subscription is not received within 120 days
of the issue of prospectus, the amt received on applications
must be refunded to the applicants within 10 days.
Minimum subscription cover
The cost of any property; purchased or to
Payment of any money borrowed for the
Any other necessary expendeture
Scanning a prospectus from the view point of an
Prospective investor should examine the condition
of industry, demand and supply etc…
Success and prospects of a company depend on its
The standing of the promoters and directors
should be judged
Minimum subscription ,securities, rights etc…
The amt paid or proposed to be paid for goodwill
and other properties should be carefully
Investor checked history of companies especially
existing business liability & assets.
Details of contracts must mentioned in prospectus
Associated organizations and its reputation and
restrictions in AOA.