Section 36 — Registration of articles
Statute text
(1) There may, in the case of company
limited by shares and there shall, in the case of a company limited by guarantee or
an unlimited company, be registered with the memorandum, articles of association
signed by the subscribers to the memorandum and setting out regulations for the
company.
(2) Articles of association of a company limited by shares may adopt all
or any of the regulations contained in Table A in the First Schedule to this Act.
(3) In t he case of an unlimited company or a company limited by
guarantee, the articles, if the company has a share capital, shall state the amount of
share capital with which the company proposes to be registered.
(4) In the case of an unlimited company or a c ompany limited by
guarantee, if the company has no share capital, the articles shall state the number
of members with which the company proposes to be registered.
(5) In the case of a company limited by shares and registered after the
commencement of this Act, if articles are not registered, or, if articles are registered,
in so far as the articles do not exclude or modify the regulations in Table A in the
First Schedule to this Act, those regulations shall, so far as applicable, be the
regulations of the company in the same manner and to the same extent as if they
were contained in duly registered articles.
(6) The articles of every company shall be explicit and without
ambiguity and, without prejudice to the generality of the foregoing, shall list and
enumerate the voting and other rights attached to the different classes of shares and
other securities, if any, issued or to be issued by it.
(7) If a company contravenes the provisions of its articles of
association, the company and every officer of the company shall be liable to a
penalty not exceeding of level 1 on the standard scale.
SECP updates linked to this section
The circulars, S.R.O.s, and notifications that shaped this section over time.
Clarifies that, subject to what the articles of association permit, a company's board may transfer an amount from its revenue reserve to its capital reserve — a reserve not regarded as free for distribution by way of dividend, per clause 73 of Table A, First Schedule. The amount so transferred may be used to issue bonus shares. In rare circumstances where the capital reserve is no longer needed, the amount may be transferred back to revenue reserve. Whenever a transfer happens either way, the company's annual audited financial statements must disclose the amount transferred during the year and the background and rationale for it, including a brief of any board-approved strategy or plan behind the transfer.