The contents of the memorandum of association as required by Sections 16, 17 and 18 of the mpanies. Ordinance include the following clauses (1) Name clause (2) situation clause (3) object clause liability clause (5) capital clause and (6) subscription clause.
ARTICLES OF ASSOCIATION:
The articles of association is the second important document in the incorporation of a company. It is 1 document which contains the rules and regulations for the internal management of the company. The icles of association embody the power of directors and other officers of the company, the right of voting the shareholders, the procedure of holding meeting, the manner of transferring the shares, the procedure issuing the shares debenture, the payment of dividends, maintenance of accounts, alteration of capital, ading up etc. etc.
The articles of association is subordinate to the memorandum. It cannot include any power which is >hibited or excluded by the Memorandum and the Companies Ordinance.
According to Section 26 of the Companies Ordinance, a company limited by shares can choose to opt table 'A' in the First Schedule which contains model rules and regulations.
The articles of association shall be printed, divided into paragraphs, numbered consecutively, signed each subscriber and dated.
The articles of association subject to the provisions of Ordinance can be altered or added by special solution.
PROSPECTUS:
It is a valuable document issued by the company for raising of the capital.
Prospectus has been defined as "any document described or issued as prospectus and includes any-bce, circular, advertisement or other communication, inviting offers from the public fcr the subscription purchase of any shares".
The main object of prospectus is to arouse the interest of the investors in the proposed company and induce them to invest in its shares and bonds etc.
The prospectus gives the details of die amount issued, the rights attached to the shares the property rchased; information about directors, auditors, bankers etc.
SHARE CAPITAL OF A JOINT STOCK COMPANY
In today's world large scale operations of a company call for a large amount of capital, The total cunt of capital is divided into smaller units. These units are called shares. Each share is assigned a iue. This value is called the par value of the share. The total capital is thus divided into a large number shares. This pool is, therefore, called share capital. This scheme of raising capital through shares (i) Ips the company to raise a large amount, and (ii) helps a larger section of the investment population to Befit from the operations of large scale business concerns.
A company has to fulfil certain legal requirements if, in later yeas, it decides to either increase or crease its share capital. And it has to state its maximum capital in the memorandum. To minimize the ances of undergoing legal formalities in later years, therefore, it is customary to state a reasonable lount as the maximum capital. This amount is incorporated in the memorandum of association and is own as the authorized capital, nominal capital, or registered capital of the company. Various terms used relation to share capital are explained in the following paragraphs.