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Chartered Accountancy, Institute of Chartered Accountants of Pakistan (Scheme 2025) · Business Law Dynamics

ICAP CAF-4 Companies Act: meetings, directors, accounts and dividends: practice questions with answers

6 free exam-style questions on Companies Act: meetings, directors, accounts and dividends for ICAP CAF-4 Business Law Dynamics. Try each one, then open the answer to read the explanation. Fincora has 15 original questions on this syllabus area.

Question 1

Shigar Agri Products Limited, a public unlisted company incorporated in 2019, has a financial year ending on 30 June 2027 and has received no extension. Under section 132 of the Companies Act, 2017, what is the last date for holding its annual general meeting for that year?

  1. A 28 October 2027
  2. B 31 October 2027
  3. C 28 September 2027
  4. D 27 November 2027
Show the answer

Answer: A. Section 132 of the Companies Act, 2017: after its first AGM (within 16 months of incorporation), a company holds an AGM within 120 days following the close of its financial year. For a special reason the registrar (the Commission, for a listed company) may extend the period by up to 30 days.

Computation: July 31 + August 31 + September 30 = 92 days to 30 September; 28 more days reaches 28 October 2027 (day 120).

Question 2

Unless its articles provide for a larger number, what is the quorum for a general meeting of a listed company under section 135 of the Companies Act, 2017?

  1. A Ten members present in person or by video-link, representing 25% of total voting power
  2. B Two members present in person or by video-link, representing 25% of total voting power
  3. C Three members present in person or by video-link, representing 10% of total voting power
  4. D Ten members present in person or by video-link, representing 10% of total voting power
Show the answer

Answer: A. Section 135(1) of the Companies Act, 2017, unless the articles provide for a larger number:

| Company | Quorum |
|---|---|
| Public listed company | 10 members present personally or through video-link, representing 25% of total voting power (on their own account or as proxies) |
| Any other company with share capital | 2 members present personally or through video-link, representing 25% of total voting power |

If there is no quorum within half an hour, a meeting called on requisition is dissolved; any other meeting stands adjourned to the same day in the next week (s 135).

Question 3

Kharian Chemicals Limited has called an extraordinary general meeting for Tuesday 14 September 2027 at 2:30 pm. Saturdays and Sundays are not working days, and no public holiday falls in that period. Its articles say nothing about the time for depositing proxies. Under section 137 of the Companies Act, 2017, what is the latest time by which a member's instrument of proxy must be deposited with the company?

  1. A Sunday 12 September 2027 at 2:30 pm
  2. B Saturday 11 September 2027 at 2:30 pm
  3. C Thursday 9 September 2027 at 2:30 pm
  4. D Friday 10 September 2027 at 2:30 pm
Show the answer

Answer: D. Section 137 of the Companies Act, 2017: an instrument appointing a proxy is deposited with the company not later than forty-eight hours before the time for holding the meeting, and in calculating that period no account is taken of any part of a day that is not a working day. An article requiring earlier deposit is void.

Counting back from Tuesday 14 September, 2:30 pm:

| Period | Working hours |
|---|---|
| Tuesday 00:00 to 14:30 | 14.5 |
| Monday (whole day) | 24 (total 38.5) |
| Saturday and Sunday | 0 (excluded) |
| Friday 14:30 to 24:00 | 9.5 (total 48) |

Latest deposit: Friday 10 September 2027 at 2:30 pm.

Question 4

Omar Hamdani, a director of Chakwal Steel Limited, missed three consecutive board meetings, held on 12 February, 9 March and 6 April 2027, without seeking leave of absence. Under section 171 of the Companies Act, 2017, what is his position?

  1. A He remains in office until absent from all meetings for three consecutive months
  2. B He remains in office until removed by a resolution of the general meeting
  3. C He has ceased to hold office, without any resolution being needed
  4. D He remains in office until the board declares his seat vacant by resolution
Show the answer

Answer: C. Section 171 of the Companies Act, 2017: a director ceases to hold office if, among other grounds, he becomes ineligible under s 153, or he absents himself from three consecutive meetings of the board without seeking leave of absence, or he (or a connected firm or private company) holds an office of profit without sanction or accepts a loan or guarantee in breach of s 182.

Omar missed three consecutive meetings without seeking leave, so his office was vacated automatically after the 6 April 2027 meeting. No general meeting or board resolution is required.

Question 5

Jamrud Electric Limited has 18,000,000 voting shares. Its board has fixed seven directors to be elected at the forthcoming general meeting by cumulative voting. Rehana Aslam holds 2,700,000 voting shares. Under section 159 of the Companies Act, 2017, how many votes does she have in the election, and how may she cast them?

  1. A 18,900,000 votes, but no more than 2,700,000 of them for any one candidate
  2. B 18,900,000 votes, which she may give all to one candidate or divide among candidates
  3. C 2,700,000 votes, which she may cast for each of up to seven candidates
  4. D 2,700,000 votes, which she may give all to one candidate or divide among candidates
Show the answer

Answer: B. Section 159 of the Companies Act, 2017: the directors fix the number of directors to be elected not later than 35 days before the meeting. Each member has votes equal to the number of voting shares held multiplied by the number of directors to be elected, and may give all the votes to a single candidate or divide them among candidates as the member wishes. Candidates are elected in the order of votes received.

Computation: 2,700,000 x 7 = 18,900,000 votes.

(For context: total votes = 18,000,000 x 7 = 126,000,000. Concentrating 18,900,000 on one candidate exceeds 126,000,000 / 8 = 15,750,000, which is enough to secure one of the seven seats.)

Question 6

The board of Swat Paper Limited has recommended a final cash dividend of Rs 3.00 per share. At the annual general meeting, members holding a large majority propose to declare Rs 4.00 per share instead. Under section 240 of the Companies Act, 2017, what is the highest dividend the meeting may declare?

  1. A Rs 4.00 per share, if passed by a special resolution
  2. B Rs 3.00 per share, the amount recommended by the board
  3. C Rs 4.00 per share, if passed by an ordinary resolution
  4. D Rs 4.00 per share, if the Commission approves the increase
Show the answer

Answer: B. Section 240(1) of the Companies Act, 2017: the company in general meeting may declare dividends, but no dividend shall exceed the amount recommended by the board. Members can declare the recommended amount or less, but cannot increase it by any majority.

The highest dividend Swat Paper's AGM may declare is Rs 3.00 per share.

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