The concept in Companies Ordinance, 1984 does not appear to be against the Injunctions of Islam, Part 2
(ii) Section 14 is regulatory section which makes it incumbent that no association, partnership or company consisting of more than 20 persons shall be formed for the purpose of carrying on any business that has for its objects the acquisition of gain by the association, partnership and company or by the individual member can function only after the registration of company under Ordinance, 1984.
(iii) Section 15 provides a procedure and mode of forming a company. According to this section, seven or more persons may form a public company and any two or more persons so associated may form a private company. The formation of the company is not against any Injunction of Islam. This section provides that the liability of the members is limited. It is submitted that if the formation of a company limited by shares of guarantee is a practice not opposed to the Injunctions of Islam, then section 16(iv) is also not opposed to Islamic injunctions. Section 18 of the Companies Ordinance 1984 relating to memorandum of limited company is a procedural section and it provides that the memorandum, in case of unlimited company, shall state the particulars mentioned in the section to give a more clarity and transparency to each item. The formation of a company under section 18 of the Companies Ordinance, 1984, does not oppose any provision of Islam. Section 20 of the Companies Ordinance, 1984, relating to restriction on alteration of memorandum has been devised to protect and safeguard the interests of shareholders and their investment. Therefore, it is not opposed to the Injunctions of Islam.
(iv) Section 21 of the Companies Ordinance, 1984 relating to alteration of memorandum provides a mechanism to alter the memorandum if, at any time, need arises to do so. The interest of every shareholder and every creditor has been fully safeguarded. Thus, it is not opposed to the Injunctions of Islam.
Section 37 of the Companies Ordinance, 1984 protects the rights of the shareholders. This section saves the shareholders from fraud and injury. This section is also not against the Injunctions of Islam.
(v) After perusal of the contents of section 42, there appears nothing in it which is contrary to the Injunctions of Islam. The purpose of this section is to prevent injury and fraud. Moreover, its proviso provides that no adverse action shall’ be taken unless the association is provided an opportunity of a salutary representation and its viewpoint is also heard. This section is in accordance with the principles of Shariah, and not opposed to any Injunction of Quran and Sunnah.
(vi) There appears to be nothing contrary to the injunctions of Shariah in Section 44. The purpose of this section is to prevent injury and fraud. According to this section conversion of public company into private company has been regulated with the prior approval of the authority.