Modaraba is a type of Partnership in which one partner participates or invest with his money or property and any other partners with his efforts or skills to run a business or partnership.
Every Company has its own registrar and the registrar of modaraba company appointed by the federal government and no company shall operate or run their business as modaraba company without registration to the registrar of modaraba.
Eligibility for Registration:
- Must be incorporated as per the companies act 2017
- Minimum Capital Requirements;
- Rs 2.5 million or more, incase of a company is only engaged in floatation and management of modaraba.
- At least Rs 7.5 million, in case of a company is engaged in any other business but from Rs 7.5 million, Rs 2.5 million set aside for modaraba management.
- The officers and directors must fulfil the following conditions:
- Normal criterial as mentioned in the Companies act 2017
- The Promoters and directors should be in the opinion of registrar persons of means and have special knowledge of the matters which the modaraba company has to deal.
Registration:
Any Company who wants to register or eligible for registration as modaraba Company may make an application on prescribed form to registrar.
Contents of Application
- Particulars of the Company;
- Name and Status of the Company
- Address of the Company
- Name and Place of Registration
- Authorize and Paid-up Capital
- Details of persons or group control the company
- Names of Subsidiary, holding and associated Company
- Description and place of business
- Particulars of directors and officers;
- Name of associated Company and the company where they have directors in the past
- Financial Standings and professional qualification
- Experience along with the related documents
- Affidavit of each person
- All the documents to be attached
- Attached all the documents to the application for registration;
- Five copies of MOA and AOA
- Five copies of incorporation of company
- Five copies of latest audit accounts
- Precise description of business being done
- Any change made by the company in the MOA and AOA and the BOD as may be required by the registrar.
Note: After fulfill all the conditions if the registrar is satisfied that the applicant shall be eligible for registration and it is in the public interest, it may grant the registration.
Floatation of Modaraba:
Any Modaraba company registered under the Modaraba Ordinance can apply to the registrar for obtaining permission to floating modaraba, for this purpose it shall submit an application in the prescribed manner or form.
Contents:
- Name Address of Modaraba and its registration number.
- Purpose, objective and duration of modaraba
- Complete descriptions of modaraba, organizational set-ups and plan along with the feaseibility report.
- Showing the details of business and operations shall be conducting and showing the operations of modaraba will be no opposed to the principles of Islam
- Amount of modaraba funds(floating), divisions and conditions
- Amount which is subscribed by the modaraba company and the amount which is set aside for the modaraba management
- Form of modaraba certificates as same as the form of shares certificate
Documents shall be Annexed with the Application;
- Copy of registration certificate of the Modaraba Company
- Five copies of prospectus signed by all the directors
- Five copies of latest audited accounts
Registrar after obtaining the certificate from the religious board that it is in the public interest and not opposed to the principles of Islam shall grant a certificate to the Modaraba Company to float a modaraba.
Winding up of Modaraba:
Voluntary Winding up:
- A Modaraba Company may be wound up under the following conditions;
- Expiration of time period for modaraba has been formed
- Objectives has been achieved for which modaraba formed.
- All the directors of modaraba company shall make a declaration of solvency that they have made full inquiry about the affairs of modaraba and shall be able to discharge his liabilities and pay the amount of modaraba fund in full within the period of 12-months.
- The declaration of solvency shall be supported by the Auditors certificate and filed with the registrar with in 90 days of expiry of period for which modaraba has formed or accomplishing the purpose of modaraba.
Winding up by Modaraba Tribunal:
A modaraba company may be wound up by the tribunal on an application made by the registrar if:
- Declaration of voluntary winding up has not been filed.
- In case the Registrar declared that;
- Modaraba has unable to pay his debts or liabilities
- Total losses of modaraba exceeds 50% of the paid-up fund
- Business of modaraba has been conducted for the fraudulent purpose
