Corporate History and

Structure
Corporate Governance
Saif Ullah Khan
 Proprietary
Partnership
form of
form
Business
Forms of
Business
Organization Joint Stock
Company
Company

Company is derived from the French words “Compaignie”

that means a body of soldiers.

Definition: A company is a legal entity made up of an

association of persons, be it natural, legal or a mixture of
both, for carrying on a commercial or industrial enterprise.
 1. It is an incorporated association
2. Artificial legal person
3. Separate legal entity
4. Perpetual succession
Characteristics 5. Common seal

of a Company 6. Limited liability

7. Transferable Shares
8. Separate Property
9. Separation of ownership and management
Classification of Companies by Mode of
incorporation

Chartered
Company

Companies
Statutory
limited by
Company
shares

Companies
Registered
limited by
Company
guarantee

Unlimited
company
 Classification on the basis of Number of
Members

Private Limited Company Public Limited Company

Restricts the transfer of shares by its members. No restriction on the transfer of shares.

Limits the maximum number of member to 50. No limits on the maximum number of shareholders.

Prohibits any invitation to public for debentures Can invite public for shares and debentures.

It can be started by two people Minimum number of shareholders is seven.

It is not required to issue a prospectus It needs to issue a prospectus.

It can start operations as soon as it receive certificate Has to wait for completion of subscription process to
of incorporation. start operation.
 History of Company form of Business

Kongo Gumi Koman Bingley Arms Bian Yi Fang Tuttle’s Red Barn
Japan Japan United Kingdom United States
Hotel Business. Arms and Ammunition China Barn
Construction
Pharmaceuticals
work

953 AD
717 AD
578 AD

1624
1416
705 AD

862 AD

1239

1614
Nishigama Onsen Staffelter Hof Egghebella Shirley
Keiunkan Germany France
Plantation
Wine Wine
Japan United States
Hotel Business Plantation

2 4 6 8
 Growth of the company form of business in
the 19th and 20th century
Reason Events

1 Acceptance of the new concept of “Limited Liability”. Acceptance in England in 1855

2 Growth of stock exchanges around the world. London Stock Exchange (1698)
New York Stock Exchange(1817)
Shanghai Stock Exchange (1860)
Tokyo Stock Exchange (1878)

3 Popularization of Capitalism as a philosophy of Development. Free markets, private capital, freedom in economic activities.

4 The Industrial Revolution 1830

5 Introduction of separate laws for Joint Stock Companies in US Company Law (1846)
different countries. Companies Act (1856)
Prussian Act (1843)
Japanese Companies Act (1844)
Chinese Companies Act (1924)

6 End of cold war and the changes that followed. Economic Integration
Convergence in International Legal and Financial Systems

7 Development of Big Emerging Markets. China, India, Brazil, Turkey, South Korea, South Africa, Russia
 Development of Modern Company in
Subcontinent 3 Phase 3
1 Phase 1
From 1600 to 1850
• English East India Company (1600).
• Dutch East India Company (1602).
• Registration of Joint Stock Companies Act
1850, didn’t recognized ‘Limited Liability’.
• Joint Stock Companies Act (1857),
recognized ‘Limited Liability’.
• Companies Act (1866), later modified in
1882.
• Indian Companies Act (1913).
2 Phase 2
Establishment of Family Businesses.
• Tata.
• Birla.
• House of Habib.
Cotton Boom and Jute Boom • Dewan.
• Cotton Boom.
• Jute Boom.
• Bombay Stock Exchange (1875).
• Ahmedabad Stock Exchange (1894).
• Calcutta Stock Exchange (1908).
• Madras Stock Exchange (1920).
• Indore Stock Exchange (1930).
• Karachi Stock Exchange (1949).
  Karachi Stock Exchange (1949)
 Securities and Exchange Ordinance, 1969.
 Securities and Exchange Authority of Pakistan (SEAP), 1970.
 Monopoly and Restrictive Trade Practices (Control and
Prevention) Ordinance, 1970.
 The Companies (Appointment of Legal Adviser) Act, 1974.

Development  Corporate Law Authority (CLA), 1981 from the merger of SEAP,
Registrar of Companies and the Monopoly Control Authority
of Modern (MCA).
 Companies Ordinance (1984).
Company in  Opening of Pakistani Stock Market to foreign investors in 1991.

Pakistan  Securities and Exchange Commission of Pakistan (SECP), 1999.

 Central Depository Company of Pakistan (CDC), 1997.
 Securities and Exchange Commission of Pakistan (SECP), 1999.
 Monopoly Control Authority (MCA) was separated from SECP
and transformed into Competition Commission of Pakistan
(CCP).
 Companies Ordinance (Amended) 2002.
 Companies Act, 2017