History of Business law in Pakistan

(Amama Rehman 11-NTU-

1012)

Definition of Business Law

Business law encompasses all of the laws that dictate how to form and run a business.
This includes all of the laws that govern how to start, buy, manage and close or sell any type of
business. Business laws establish the rules that all businesses should follow. A savvy
businessperson will be generally familiar with business laws and know when to seek the advice
of a licensed attorney. Business law includes state and federal laws, as well as administrative
regulations. Let's take a look at some of the areas included under the umbrella of business law.
Business law encompasses all of the laws that dictate how to form and run a business. This includes all
of the laws that govern how to start, buy, manage and close or sell any type of business.

Type of laws in Pakistan:

Banking and Credit Laws

Banking Companies Ordinance, 1962 and Banking Companies Rules, 1963

State Bank of Pakistan Act, 1956

Draft Banking Act, 2006

Financial Institutions (Recovery of Finances) Ordinance, 2001

Foreign Exchange Manual, 2002

Micro-Finance Banking Ordinance, 2000

Microfinance Institutions Ordinance, 2001

Bankruptcy and Collateral Laws

Provincial Insolvency (West Pakistan Amendment) Ordinance, 1959

Companies Ordinance, 1984

Civil Procedure Codes

Law and Justice Commission of Pakistan (Procedure) Rules, 1980

Law and Justice Commission of Pakistan Ordinance, 1979

History of Business law in Pakistan

(Amama Rehman 11-NTU-

1012)

Code of Civil Procedure (West Pakistan Amendment) Act, 1964

Commercial and Company Laws

Code of Corporate Governance

Companies (Amendment) Ordinance, 2002

Companies (Appointment of Legal Advisors) Act 1974

Companies (Appointment of Legal Advisors) Rules 1975

Companies (Buy Back of Shares) Rules, 1999

Companies (General Provision and Form) Rules, 1985

Companies Ordinance, 1984

Electronic Transactions Ordinance, 2002

Companies Ordinance, 1984 insofar as it relates to private companies, non-listed public

companies and foreign companies

Chartered Accountants Ordinance, 1961

Companies (Invitation and Acceptance of Deposit) Rules, 1987

Companies (Issue of Capital) Rules, 1996 (for non-listed companies)

Companies (Registration Offices Regulations), 2003

Companies (Second Amendment) Ordinance, 2002

Prudential Regulations for NBFCs

Law of Contract

Single Member Companies Rules, 2003

Constitutions

Constitution of Pakistan

History of Business law in Pakistan

(Amama Rehman 11-NTU-

1012)

Labor Laws

Factories Act, 1934

West Pakistan Minimum Wages for Unskilled Workers Ordinance, 1969

Minimum Wages (West Pakistan Amendment) Ordinance, 1970

Minimum Wages Ordinance, 1961

Payment of Wages Act, 1936

Land and Building Laws

Land Acquisition Act 1894

The Lahore Development Authority Act, 1975

The Punjab Development of Cities Act, 1976

THE PUNJAB HOUSING AND TOWN-PLANNING AGENCY ORDINANCE, 2002

Punjab Government Lands and Buildings (Recovery of Possession) Ordinance, 1966

Land Reforms Regulation, 1972

Securities Laws

Brokers and Agents Registration Rules, 2001

Central Depositories (Amendment) Act, 1997

Central Depositories Act, 1997

Companies (General Provisions and Forms) Rules, 1985

Companies Ordinance, 1984

Clearing House (Registration and Regulations) Rules 2005

Voluntary Pension System Rules, 2005

Balloters, Transfer Agents and Underwriters Rules, 2001

History of Business law in Pakistan

(Amama Rehman 11-NTU-

1012)

Listed Companies (Substantial Acquisition of Voting Shares and Take-overs) Ordinance,

2002

Margin Trading Rules, 2004

Securities and Exchange Ordinance, 1969

Tax Laws

Stamp Act

Income Tax Ordinance, 2001

Tax Law (Amendments) Ordinance, 1999

Trade Laws

Safeguard Measures Ordinance, 2002

Safeguard Measures Rules, 2003

Anti-Dumping Duties Ordinance, 2000

Anti-Dumping Duties Rules, 2001

Countervailing Duties Ordinance, 2000

Countervailing Duties Rules, 2002

Common Law / Civil Law

COMMON LAW OR CIVIL LAW IN PAKISTAN. LAW APPLICABLE!!

There is a fine distinction between Civil Law and Common Law, however the
same are used interchangeably in Pakistan and most countries of the World. Pakistan was a
colony of the British Empire pre partition therefore, Common law systems were inherited by
Pakistan which places greater weight on court decisions, as opposed to civil law where judicial
precedent is given less weight (which means that a judge deciding a given case has more
freedom to interpret the text of a statute independently, and less predictably), and scholarly
4

History of Business law in Pakistan

(Amama Rehman 11-NTU-

1012)

literature is given more. As a general rule of thumb, common law systems trace their history to
England, while civil law systems trace their history to Roman law and the Napoleonic Code.
Common law is law developed by judges through decisions of courts and similar tribunals (also
called case law), rather than through legislative statutes or executive branch action. A common
law system is a legal system that gives great precedential weight to common law, on the
principle that it is unfair to treat similar facts differently on different occasions. The body of
precedent is called common law and it binds future decisions.
COMMON LAW CASES (CIVIL DISPUTES) BROUGHT INTO PAKISTANI COURTS?
Common Law seeks to resolve non-criminal disputes such as disagreements over the meaning of
contracts, property ownership, divorce, child custody, and damages for personal and property
damage. A civil court is a place where people can solve their problems with people peacefully.
The function of civil law is to provide a legal remedy to solve problems. Sometimes civil
law/common law is based on a state or federal statute; at other times civil law is based on a
ruling by the court.
Civil law covers a wide spectrum of topics. Some of these topics are:

CONSUMER LAW

INTERNATIONAL LAW

AGRICULTURAL LAW

EMPLOYMENT LAW

ANIMAL LAW

ENTERTAINMENT LAW

BUSINESS LAW

FAMILY LAW

SPORTS LAW

TAX LAW

INTENTIONAL TORTS SUCH AS LIBEL, SLANDER, DEFAMATION OF CHARACTER,

BATTERY AND ASSAULT.

NEGLIGENCE

History of Business law in Pakistan

(Amama Rehman 11-NTU-

1012)

corporate law in Pakistan, History of Company Law in

Pakistan, Companies Ordinance 1984
Today the corporate sector of Pakistan is governed by Companies Ordinance of 1984. The
history of corporate law in this region is much older than the history of Pakistan. Great Britain
passed Companies Act in 1908 which introduced several important provisions relating to
company administrations. In 1913 after five years, Companies Act of 1913 was passed in British
India. Pakistan came into being on 14 August 1947 and adopted the companies Act of 1913. In
1959 a company Law Commission was set up to make laws in accordance with modern times.
Report of Company Law Commission of Pakistan was published in 1960. Finally the Companies
Act of 1913 was replaced by the Companies Ordinance 1984.

Main Objectives of Companies Ordinance 1984:

Its main purpose is to consolidate the law related with companies and certain other
associations.

Second purpose is to make sure the growth of Corporate Enterprises in Pakistan.

To protect the investors and creditors. This is important because foreign investments
require better protection and minimum risks and hence the objective of law is to save
them.

Promotion of investment and development of economy.

Labour Law in pakistan

Pakistans labour laws trace their origination to legislation inherited from India at the time of
partition of the Indo-Pak subcontinent. The laws have evolved through a continuous process of
trial to meet the socio-economic conditions, state of industrial development, population and
labour force explosion, growth of trade unions, level of literacy, Governments commitment to
development and social welfare. To meet the above named objectives, the government of the
Islamic Republic of Pakistan has introduced a number of labour policies, since its independence
6

History of Business law in Pakistan

(Amama Rehman 11-NTU-

1012)

to mirror the shifts in governance from martial law to democratic governance.

Under the Constitution labour is regarded as a concurrent subject, which means that it is the
responsibility of both the Federal and Provincial Governments. However, for the sake of
uniformity, laws are enacted by the Federal Government, stipulating that Provincial
Governments may make rules and regulations of their own according to the conditions prevailing
in or for the specific requirements of the Provinces. The total labour force of Pakistan is
comprised of approximately 37.15 million people, with 47% within the agriculture sector,
10.50% in the manufacturing & mining sector and remaining 42.50% in various other
professions.

Contract of Employment
While Article 18 of the Constitution affords every citizen with the right to enter upon any lawful
profession or occupation, and to conduct any lawful trade or business, the Industrial and
Commercial Employment (Standing Orders) Ordinance was enacted in 1968 to address the
relationship between employer and employee and the contract of employment. The Ordinance
applies to all industrial and commercial establishments throughout the country employing 20 or
more workers and provides for security of employment. In the case of workers in other
establishments, domestic servants, farm workers or casual labour engaged by contractors, their
labour contracts are generally unwritten and can be enforced through the courts on the basis of
oral evidence or past practice.
Every employer in an industrial or commercial establishment is required to issue a formal
appointment letter at the time of employment of each worker. The obligatory contents of each
labour contract, if written, are confined to the main terms and conditions of employment, namely
nature and tenure of appointment, pay allowances and other fringe benefits admissible, terms and
conditions of appointment.