AL-MUNAWAR COMMERCE ACADEMY

COMPANYAL-MUNAWAR COMMERCE

ACADEMY

B.COM PART- ll

MORNING SECTION

(GIRLS)

DEFINITION :

An association which is created or affected by law.

Or The business which is registered under the

co. ordinance 1984 .

First Company Of The World: (was established in 13th century in Italy)

First Company In England: (was established during 17th or 18th century)

First Company Of Asia: (was established in 1600)

Act of company

Today the corporate sector of pakistan is governed by companies ordiance 1984.

1984

14th august 1947

Act of 1913 Passed by British India

1947 – 1959 At the end of 1959

1960 Publish

1984 Accept

1985 Practice

KINDS OF COMPANY

1) CLASSIFICATION BY INCORPORATION

2) CLASSIFICATION BY SHARES

3) CLASSIFICATION BY FINANCIAL LIABILITY

4) CLASSIFICATION BY OWNERSHIP

1) CLASSIFICATION BY INCORPORATION

ACCORDING TO INCORPORATE COMPANY CAN BE CLASSIFIED AS :

1) CHARTERED COMPANY

2) STATUTORY COMPANY

3) REGISTERED COMPANY

2) CLASSIFICATION BY SHARES

ACCORDING TO SHARES COMPANY CAN BE CLASSIFIED AS:

1)PUBLIC COMPANY

2)PRIVATE COMPANY

3) CLASSIFICATION BY LIABILITY

ACCORDING TO LIABILITY COMPANY CAN BE CLASSIFIED AS:

1) LIMITED BY

SHARES

2) LIMITED BY

GUARANTEE

4) CLASSIFICATION BY OWNERSHIP ACCORDING TO OWNERSHIP

COMPANY CAN BE CLASSIFIED AS :

1) GOVERNMENT COMPANY

2) SEMI GOVERNMENT COMPANY

3) HOLDING COMPANY

4) SUBSIDIARY COMPANY

ABOUT COMPANY

BOARD OF DIRECTORS :- Directors are the person which are elected by ordinary shareholders in AGM to promote/direct the affairs of corporation.

AUTHORIZED CAPITAL :-This is maximum numbers of shares that a firm can legally issue.

RETAINED EARNING :-This is the term which is used in corporate business. This account is also used for distribution of dividend & appropriation of reserves

SHARES :-The share is a certificate of ownership in a company . A person who has this certificate is called shareholder.

According to sec 89 company act 19841) Ordinary share 2) Preferred share 3)

Underwriters 4) Share premium 5) Share discount 6) Market value

DIVIDEND :- Company paid to its shareholder in shape of profit. This profit in the term of accounting is known as DIVIDEND.

CASH DIVIDEND :-When company paid out profit in shape of cash or check.

STOCK DIVIDEND :-When company paid out profit in shape of additional shares and stock.

DIVIDEND

CASH

DIVIDEND

STOCK

DIVIDEND

PRELIMINARY EXPENSE :-Initially expense or cost to use establishment of corporation. This cost is not considered as expense but capitalized.

DEBENTURES/BONDS :-They are the financial certificate and any other securities other then shares of a company. They include in long term liability and redeemed after a long period of time .

FORMATION OF COMPANY

INCORPORATION OF A COMPANY IS COMPLICATED PROCEDURE.

IT REQUIRES THE FOLLOWING STEPS :

1) GETTING PROMOTORS TOGETHER

2) APPOINTMENT OF ADVISOR AND PREPRATION OF COMPANY DOCUMENT.

3) SUBMISION OF APPLICATION

4) PAYMENT OF REGISTRATION FEE

5) PRINTING SHARE CERTIFICATE

6) ISSUANCE OF REGISTRATION CERTIFICATE

7) PUBLICATION OF PROSPECTUS

DOCUMENTS OF COMPANY

1) MEMORANDUM OF ASSOCIATION (MOA)

2) ARTICLES OF ASSOCIATION (AOA)

3) PROSPECTUS

DOCUMENTSDOCUMENTS

PROSPECTUS

IT IS AN INVITATION, ADVERTISEMENT OR CIRCULAR OF A COMPANY

ONLY PUBLIC LIMITED COMPANY CAN ISSUE PROSPECTUS

CONTENTS OF PROSPECTUS

PROSPECTUS INCLUDE THE FOLLOWING MATTERS :

1) SHARE CAPITAL

2) BRIEF HISTORY

3) FINANCIAL INFORMATION

4) BOARD OF DIRECTORS

5) INTREST OF DIRECTORS

6) GENERAL INFORMATION

7) MISCELLANEOUS

8) APPLICATION AND ALLOTMENT

MEMORANDUM OF ASSOCIATION

IT IS PREPARED AT THE TIME OF REGISTRATION .

IT IS KNOWN AS CHARTER OF A COMPANY

IT DETERMINES THE RIGHTS, POWER

& OBJECT OF A COMPANY.

CLAUSES OF ( MOA )

THE MOA HAS FOLLOWING SIX CLAUSES

1) NAME CLAUSE

2) DOMICILE CLAUSE

3) OBJECT CLAUSE

4) CAPITAL CLAUSE

5) LIABILITY CLAUSE

6) ASSOCIATION CLAUSE

ARTICLES OF ASSOCIATION

IT IS INTERNAL DOCUMENT OF A COMPANY

IT EXPLAIN RULES AND REGULATION OF COMPANY

CONTENTS OF ( AOA )

IT INCLUDE RULES AND REGULATION ABOUT FOLLOWING :

1) SHARE CAPITAL AND ITS DIVISION

2) METHOD OF TRANSFER SHARES

3) CONVERSION OF SHARES

4) METHOD TO CALL THE MEETING OF THE COMPANY

5) VOTING POWER OF MEMBERS

6) APPOINTMENT OF DIRECTORS

7) POWER AND DUTIES OF DIRECTORS

8) ACCOUNTS AND THEIR AUDIT

9) NOTICE TO BE ISSUED BY COMPANY

10)WINDING UP A COMPANY

MEETINGS OF COMPANY

DIFFERENT TYPES OF MEETINGS

1) Share Holders Meeting:

a)Statutory Meeting:

First meeting of the companyLegally enforced by lawTime periodNotice of meetingobjectives

b)Annual General Meeting (AGM): General meeting of company members

every yearFirst AGMNotice of meetingPlace of meetingobjectives

c)Extra ordinary meeting:

All general meetings except statutory

and AGM Irregular TimeEmergency G.M

Meeting of elected directors of company

a)Board Meeting

b)Committee Meeting

2) Director’s Meeting:

Meeting Of ShareholdersIrregular timeHolder of the meeting

a)Class Meeting

b)Creditor’s Meeting

3) Special Meetings:

BUSINESS COMBINATIONS

1) CLASSIFICATION BY AGREEMENTS

2) CLASSIFICATION BY OWNERSHIP

3) CLASSIFICATION BY STRUCTURE

1) COMBINATION ACCORDING TO AGREEMENTS

ACCORDING TO AGREEMENT COMBINATIONS ARE AS FOLLOW :

• CARTEL• JOINT VENTURE• POOL• TRUST

2) COMBINATION ACCORDING TO OWNERSHIP

ACCORDING TO OWNERSHIP COMBINATIONS ARE AS FOLLOW :

MERGER

A+a+b=A* AMALGAMATION

A+B+C=D

3) COMBINATIONS ACCORDING TO STRUCTURE

ACCORDING TO STRUCTURE COMBINATIONS ARE AS FOLLOW :

VERTICAL

COMBINATION HORIZONTAL

COMBINATION

VERTICAL COMBINATION

DEFINITION :

Vertical integration is the combination of firms in successive stage of same industry.

FLOUR MILL

(raw material)

BAKERY (manufacturing)

BISCUIT FACTORY

(wholesaler)

MARKET

(retailer)

HORIZONTAL COMBINATION

BUSINESS UNITS DEALING IN THE PRODUCTION OF SIMILAR PRODUCT COMBINE UNDER A SINGLE MANAGEMENT.

DEFINITION :

A

TOOTHPASTE

FACTORY

B

TOOTHPASTE

FACTORY

C

TOOTHPASTE

FACTORY

MANAGEMENT

MARKET

MERITS OF COMPANY

ACCUMULATION OF LARGE RESOURCES LIMITED LIABILITY CONTINUITY IN EXISTENCE EFFICIENT MANAGEMENT ECONOMIES OF LARGE SCALE

PRODUCTION TRANSFERABILITY OF SHARES DIFFUSED RISK DEMOCRATIC SET – UP SOCIAL BENEFITS

DEMERITS OF COMPANY

Difficulty in formation Double taxation Difference in opinion Lack of freedom LACK OF SECRECY

WINDING UP OF COMPANY

DEFINITION :-

WINDING UP OF A COMPANY IS THE PROCESS OF PUTTING AN END TO ITS LIFE. AT THE END OF THE WINDING UP , THE COMPANY WILL BE DESTROYED OR DISSOLVED AND WILL HAVE NO ASSETS AND LIABILITIES.

REASONS FOR WINDING UP

1) MAIN OBJECT OF THE COMPANY FOR WHICH ITS WAS ESTABLISHED HAS BEEN ACCOMPLISHED.

2) IT HAS BECOME IMPOSSIOBLE TO CARRY OUT THE MAIN OBJECTS OF THE COMPANY.

3) THE COMPANY IS NOT IN A POSITION TO PAY ITS DEBTS IN FULL.

WINDING UP OF THE COMPANY

COMPANY MAY BE WOUND UP UNDER TWO CONDITIONS

1) WINDING UP BY THE LAW OF COURT

2) VOLUNTARY WINDUP

1) WINDUP BY COURT LAW

• Failure in holding statutory meetings. • Failure to show statutory report• Reduction of membership below minimum • Inability to pay debts • Default in filing balance sheets, profit and loss account or annual returns

APPLICATION OF WINDING UP

THE FOLLOWING CAN SEND APPLICATION FOR WINDING UP OF COMPANY

1) COMPANY ITSELF

2) CONTRIBUTRIES

3) CREDITORS

4) ALL OR ANY OF THE ABOVE PARTIES JOINTLY OR SEPARATELY

5) REGISTRAR

2) VOLUNTARY WINDUP

THERE ARE TWO KINDS OF VOLUNTRY WINDUP

A) AT THE WILL OF MEMBER

B) AT THE WILL OF CREDITORS

OBJECT OF VOLUNTARY WIND UP

THE OBJECT OF VOLUNTARY WINDING UP IS THAT THE COMPANY AS WELL AS THE CREDITORS IS LEFT FREE TO SETTLE THEIR AFFAIRS WITHOUT GOING TO COURT.

CIRCUMTANCES IN WHICH COMPANY WIND UP VOLUNTARILY

BY PASSING AN ORDINARY RESOLUTION

BY PASSING SPECIAL RESOLUTION

1) BY PASSING AN ORDINARY RESOLUTION

WHN THE PERIOD FOR THE DURATION OF THE COMPANY BY THE ARTICLE HAS EXPIRED, THE COMPANY IIN GENERAL MEETING MAY PASS AN ORDINARY RESOLUTION FOR ITS VOLUNTARY WINDING UP.

2) BY PASSING SPECIAL RESOLUTION

A COMPANY MAY AT ANY TIME PASS A SPECIAL RESOLUTION FOR WINDING UP

FINANCIAL STATEMENT

COMPONENTS OF FINANCIAL STATEMENTS

Statement of financial position

Statement of comprehensive income

Statement of changes in equity

Statement of cash flows Notes.

X.Y.Z. CO STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED DEC 31, 2014

SALES

COST OF SALES

GROSS PROFIT

SELLING EXPENSE

ADMINISTRATION EXPENSE

NET INCOME

OTHER OPERATING INCOME

OTHER OPERATING EXPENSES

NET INCOME FROM OPERATION

FINANCIAL EXPENSES

PROFIT BEFORE TAXATION

TAXATION

PROFIT FOR THE YEAR

OTHER COMPREHNSIVE INCOME

TOTAL COMPREHNSIVE INCOME

DEC 31, 2014 DEC 31,2013

XXX XXX

(XXX) (XXX)

XXX XXX

(XXX) (XXX)

(XXX) (XXX)

XXX XXX

XXXX XXXX

(XXXX) (XXXX)

XXX XXX

(XXX) (XXX)

XXX XXX

(XXX) (XXX)

XXX XXX

XXX XXX

XXX XXX

X.Y.Z. COBALANCE SHEET

FOR THE YEAR ENDED DEC 31,2014

DEC 31, 2014 DEC 31, 2013

EQUITY :

SHARES CAPITAL & RESERVES XXX XXX

NON-CURRENT LIABILITIES XXX XXX

CURRENT LIABILITIES XXX XXX

TOTAL EQUITY XXXXXXXXX XXXXXXXX

ASSETS :NON-CURRENT ASSETS XXX XXX

CURRENT ASSETS XXX XXX

TOTAL ASSETS XXXXXXXX XXXXXXX

QUESTION TIME

THANK YOUSIR MUNAWAR

SIR IRFAN , SIR FARHAN & SIR WASEEM

THANK YOU

PRESENTED BY : SYEDA NIDA HABIBA SAKINA BISMA ARIBA BINISH SAMIYA SAIMA MAHAM RIDA SUMAIYA DARAKSHAN UROOSA MARINA

PREPARED BY :

Ram