Syllabus: Paper E15 Corporate Laws

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:
WEIGHTAGE
SYLLABUS CONTENT AREA
(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. 40
2. “The Companies Ordinance, 1984” from section 261 onwards.
3. Second Schedule. [Part-I, II & III]
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.

Compiled By: Muhammad Adnan Arshad Walana [23.04.2009]

Syllabus: Paper E15 Corporate Laws

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 PART OF THE COMPANIES

SECTION #
AREA C.O., 1984 ORDINANCE, 1984
Management and Administration:
and also including especially;
- Investigation and related matters
(Section 263 – 282)
2.1 PART-VIII - Non Banking Finance Companies 142 – 282
(NBFC) Provisions as to
Establishment and Regulation of
NBFC
(Section 282A – 282N)
Arbitration, arrangements and
2.2 PART-IX 283 – 289
reconstruction
Prevention of oppression and
2.3 PART-X 290 – 296
mismanagement
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
Cases in which company may be
2.4.1.2.1 305 – 306
wound-up by court
2.4.1.2.2 Petition for winding-up 309 – 310

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Syllabus: Paper E15 Corporate Laws
2.4.1.2.3 Commencement of winding-up 311
Official liquidators
* (Students should be familiar with 321 – 331,
2.4.1.2.4 the contents of statement of affairs & 333, 334, 336,
report of liquidator as set out in 337
section 328 & 329)
339 – 341,
2.4.1.2.5 Powers of court
346 – 350
2.4.1.2.6 Enforcement of orders 355 – 357
2.4.1.3 Voluntary Winding-Up
Resolutions for, & commencement of
2.4.1.3.1 358 – 359
winding-up
Consequences of voluntary winding-
2.4.1.3.2 360 – 361
up
2.4.1.3.3 Declaration of solvency 362
Provisions applicable to members’
2.4.1.3.4 363 – 371
voluntary winding-up
Provisions applicable to creditors’
2.4.1.3.5 372 – 382
voluntary winding-up
Provisions applicable to every
2.4.1.3.6 383 – 395
voluntary winding-up
Winding-up subject to supervision of
2.4.1.3.7 396 – 401
court
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 – 407
Supplementary provisions as to 421 – 422,
2.4.1.4.3
winding-up 431 – 434
WINDING-UP OF
2.4.2 PART-XIII 443 – 449
UNREGISTERED COMPANIES
2.5 Companies established outside Pakistan
Provisions as to establishment of
2.5.1 PART-XIV 450 – 460
places of business in Pakistan
2.5.2 Prospectus 461 – 462
2.6 PART-XV Registration office and fees 468 – 469
2.7 General
PART-XVI
2.7.1 Legal proceedings, offences, etc. 494 – 496

Compiled By: Muhammad Adnan Arshad Walana [23.04.2009]

Syllabus: Paper E15 Corporate Laws

3. SECOND SCHEDULE OF THE COMPANIES ORDINANCE, 1984

Salient features of disclosure requirements for prospectus or statement in lieu of prospectus and
understanding of the reports and certificates to be included in the prospectus
2.8 (SEE SECTIONS 45, 53 AND 69)
PART-I Matters to be specified in prospectus
2.8.1 1, 2 & 3
and reports to be set out therein
PART-II Form of statement in lieu of
prospectus to be delivered to
registrar by a company which does
2.8.2 not issue a prospectus or which does 1&2
not go to allotment on a prospectus
issued, and reports to be set out
therein
PART-III Form of statement in lieu of
prospectus to be delivered to
2.8.3 registrar by a private company on 1, 2 & 3
becoming a public company and
reports to be set out therein

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 is
required
- 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]

Compiled By: Muhammad Adnan Arshad Walana [23.04.2009]

Syllabus: Paper E15 Corporate Laws

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 the
following 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.

Compiled By: Muhammad Adnan Arshad Walana [23.04.2009]

Syllabus: Paper E15 Corporate Laws

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 foreign
controlled 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
ƒ repatriable basis
ƒ non-repatriable basis

Compiled By: Muhammad Adnan Arshad Walana [23.04.2009]

Syllabus: Paper E15 Corporate Laws

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

Compiled By: Muhammad Adnan Arshad Walana [23.04.2009]

Syllabus: Paper E15 Corporate Laws

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)

Compiled By: Muhammad Adnan Arshad Walana [23.04.2009]

Syllabus: Paper E15 Corporate Laws

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)

Compiled By: Muhammad Adnan Arshad Walana [23.04.2009]

Syllabus: Paper E15 Corporate Laws

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.

Compiled By: Muhammad Adnan Arshad Walana [23.04.2009]