Questions and Answers
What is meant by 'beneficial ownership of shareholders or officer of a company'?
Who is considered a 'minor' under the provisions of beneficial ownership?
What is meant by 'control' in relation to securities?
In the case of a company where an officer or substantial shareholder is a shareholder, which securities are considered beneficially owned?
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Who is not considered a beneficial owner of securities under the provisions?
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What is the minimum percentage of issued share capital required for a person to be considered a substantial shareholder?
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What is not included in the definition of a 'body corporate' or 'corporation'?
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What is the primary responsibility of a chief financial officer?
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What is the meaning of 'central depository' under this Act?
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What is included in the definition of 'books of account'?
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Study Notes
Beneficial Ownership
- Beneficial ownership refers to ownership of securities held, controlled, or beneficially owned by an officer or substantial shareholder directly or indirectly.
- Includes ownership by:
- The officer or substantial shareholder themselves.
- The spouse of an officer who is not an officer themselves.
- Minor son or daughter of an officer (under 18 years old).
- A company where the officer or substantial shareholder is a shareholder, to the extent of their proportionate shareholding.
Control and Substantial Shareholder
- Control means the power to exercise a controlling influence over the voting power attached to securities.
- A substantial shareholder is a person who has an interest in shares of a company:
- With a nominal value equal to or more than 10% of the issued share capital.
- Which enables them to exercise or control 10% or more of the voting power at a general meeting.
Key Definitions
- Board: Board of directors of a company.
- Body corporate or corporation: Includes companies incorporated under this Act, companies incorporated outside Pakistan, and statutory bodies declared as body corporate, but excludes co-operative societies and certain other entities.
- Book and paper: Includes books of account, cost accounting records, deeds, vouchers, writings, documents, minutes, and registers maintained on paper or in electronic form.
- Books of account: Include records of all sums of money received and expended, sales and purchases, assets and liabilities, and items of cost.
Other Key Terms
- Central depository: Has the same meaning as assigned to it under the Securities Act, 2015.
- Chartered accountant: Has the same meaning as assigned to it under the Chartered Accountants Ordinance, 1961.
- Chief executive: An individual entrusted with the management of a company's affairs, subject to the board's control and directions.
- Chief financial officer: An individual appointed to perform customary CFO functions and duties.
- Commission: Has the same meaning as assigned to it under the Securities and Exchange Commission of Pakistan Act, 1997.
- Company: A company formed and registered under this Act or the company law.
- Company law: Includes the repealed Companies Act, 1913, Companies Ordinance, 1984, Companies Ordinance, 2016, and this Act.
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Description
This quiz covers the concept of beneficial ownership in a company, including securities owned by officers, substantial shareholders, and their family members.