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The Companies Ordinance 1984

Understanding Section 65 Rehan Aziz Shervani (Advocate High Court) Cell: 0333-4324961

Section 65: Construction of references to offering of shares or debentures to the public etc.
Construction (= interpretation) References (= hints; indication)

Thus the heading sounds as: Interpretation of hints relating offer of shares or debentures to the public etc.

Subsection (1): Any reference in this ordinance or in the articles of a company to offering of shares or debentures to the public, or to invitation to the public to subscribe for shares or debentures, shall, unless otherwise expressly provided in this ordinance, include a reference to offering of shares or debentures to any section of the public or to invitation to any section of public to subscribe for shares or debentures, as the case may be. Explanation:- The term section of the public includes existing members or debenture holders of the company or clients of the person issuing the prospectus.
Section 65 Subsection 1 consists of following two parts: (Section 65 Subsection 1 = 2 Parts)
(1) Any

reference in this Ordinance or in the articles of a company to offering of shares or debentures to the public shall, unless otherwise expressly provided in this ordinance, include a reference to offering of shares or debentures to any existing members or debentures holders of the company or clients of the person issuing the prospectus.

Offering (= the act of presenting for acceptance) Public (= community)


(2) Any

reference in this ordinance or in the articles of a company to invitation to the public to subscribe for shares or debentures shall, unless otherwise expressly provided in this ordinance, include a reference to invitation to any existing members or debentures holders of the company or clients of the person issuing the prospectus to subscribe for shares or debentures. Invitation to the public to subscribe (= call to the public to give offer)

Subsection (2): No offer or invitation shall be treated as made to the public by virtue of sub section (1) if the offer or invitation can properly be regarded, in all circumstances(a) as not being calculated to result, directly or indirectly, in the shares or debentures becoming available for subscription or purchase by persons other than those receiving the offer or invitation; or (b) otherwise as being a domestic concern of the persons making and receiving the offer or invitation.
The subsection has following two parts: (1) No offer or invitation shall be treated as made to the public by virtue of sub section 1 if the offer or invitation can properly be regarded , in all circumstances as not being calculated to result, directly or indirectly, in the shares or debentures becoming available for subscription or purchase by persons other than those receiving the offer or invitation; Calculated (=planned to) (2) No offer or invitation shall be treated as made to the public by virtue of sub section 1 if the offer or invitation can properly be regarded, in all circumstances otherwise as being a domestic concern of the persons making and receiving the offer or invitation Otherwise (=in another way; else) Domestic concern (=Family occupation)

Sub Section 3:

Without prejudice to the generality of sub section (2), a provision in a companys articles prohibiting invitations to the public to subscribe for shares or debentures shall not be taken as prohibiting the making to members or debentures holders of an invitation which can properly be regarded in the manner set forth in that subsection.
Without prejudice to the generality (= without harming the general idea) Prohibiting (=banning) Subscribe (= offer) Set forth (= describe) Thus without harming the general idea of subsection (2) a provision in a companys articles prohibiting invitations to the public to subscribe for shares or debentures shall not be taken as prohibiting the making to members or debentures holders of an invitation which can properly be regarded in the manner set described in that section.

Subsection 4: The provisions of this ordinance relating to private companies shall be construed in accordance with the provisions contained in sub section (1) to (3).
Disclaimer: The exposition is published for information purpose only; is not a legal opinion etc; for professional purposes consult official Gazette published by Federal Government of Pakistan.

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