Companies (Issue of Capital) Rules, 1996
The Companies (Issue of Capital) Rules, 1996 were made by Corporate Law Authority in exercise of the powers conferred by section 506 of the Companies Ordinance, 1984 (XLVII of 1984) read with Finance Division’s Notification No. S.R.O. 698(I)/ 86, dated the 2nd July, 1986.
They shall apply to: the companies proposing to issue share capital to the public; listed companies proposing to increase share capital through right issue or bonus issue; all companies proposing to issue shares for consideration otherwise than in cash; certain persons offering shares for sale to the public; and sponsors of the issuing and listed companies. The rules are made by the corporate law authority. A company which proposes to raise capital through issue of shares to the general public shall comply with the provisions of the rules. The rules contain regulations regarding the issuance of shares by the company. A company may issue shares to the general public at premium subject to the certain limitations. A listed company can issue right shares, and bonus shares. The rules also provide that a company may issue shares for consideration otherwise than cash. A person or group of persons, holding more than ten per cent (10%) shares of a company, may offer such shares for sale to the public. Whoever fails or refuses to comply with, or contravenes any provision of these rules, or knowingly and willfully, authorizes/abets or permits such failure, refusal or contravention, shall, in addition to any other liability under the ordinance be also punishable with fine not exceeding five hundred thous and rupees, and in case of continuing failure, refusal or contravention, to a further fine not exceeding ten thous and rupees for every day after the first during which such contravention continues.
