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Functions of Legal and Corporate Department - awaisaftab - 01-20-2010

Pakistan is a country where hundreds of legislations exist. Many laws are directly and indirectly related to corporate, industrial, commercial and business sector.
This extensive legislation gave birth to the requirements of personals having knowledge of laws. It is noted even many sole proprietor for of businesses has full time legal advisors. But the need for appointment of legal advisor is mainly depends upon the nature of business and applicable legislations .According to section (3) Companies Legal Advisors Act, 1974 every company which has paid up capital of Rs. 500,000/- or more is required to appoint a legal advisor to advise such company in the performance of its functions and the discharge of its duties in accordance with laws. Some professionals believe that this limit of paid up capital should be increased because it was set our in 1975.and no amendment has been made since then. Mostly companies appoint legal advisor only for fulfilling legal requirement and for filling of Form 29.


It is surprising that it is generally presumed that the laws with which a business encounters are corporate and tax laws. Although this is truth that majority of businesses need legal advices in relation to these laws but it is not the whole picture. In Pakistan many regulatory bodies, laws and regulations relating to specific industries exist.
In result many businesses and companies require services of legal professionals and persons having extensive knowledge of laws.


Correspondence and dealing with regulators and fulfilling their legal requirements and additionally application of laws litigations necessitate the need of full fledge legal department.
.
Functions of Legal and Corporate Departments

A. Corporate Laws
1. Fulfillment of legal requirement of Companies Ordinance,1984., specially provisions relating to issue of capital, appointment and election of directors, meetings and proceedings and corporate documentation.

2. Secretarial Practices which require maintenance of various statutory books and registers, correspondence with shareholders and members, make sure smooth holding of meetings and election of directors

3. Compliance with code of corporate governance 2005, in case of listed companies.

4. Ensuring of application of various corporate rules for instance Companies (Issue of Capital) Rules, Companies (Audit of Cost Accounts) Rules and Companies (Buy Back of Shares) . Communication of legal provisions and advices to Board of Directors and those who charged with governance.

5. Ensuring that all notices of meetings, dividend warrants and share certificates are dispatched to all shareholders as per statutory requirements and time frame.

6. Preparation of minutes of the meeting of shareholders and Board of Directors.

7. Arrangements for holding elections of directors and meeting in smooth and legitimate way.

B. Tax Laws

1. Following are major tax laws in Pakistan
a. Income Tax Ordinance,2001
b. Income Tax Rules,2002
c. Sales Tax Act
d. Federal Excise Duty Act
e. Customs Act
2. The legal department expresses legal opinion in relation to tax laws, pursue litigation, relation to tax laws in appellate benches and courts.
3. Ensure compliance with tax laws and their implementation

C Copyright and Trade Marks

1. Registration of Trade Marks of new products, renewal of trade mark certificates and revision of trade mark of existing products. Correspondence with Regulator regarding trademarks and copyright issues and handling of legalities relating to copyright and trade marks matters.
2. Requisition of licenses, patents and copyrights and legal documentation in this regard.


D. Factories and Labour Laws
1. There are a number of legislations which are relating to factories and labour force some of which are as follows

a. Factories Act ,1934
b. Workmen Compensation Act
c. Social Welfare Ordinance
d. Industrial Relation Ordinance
e. Employees Old Age Benefits Act

2. The legal department of a company is liable to make ensure the application of these laws, express legal opinion in the light of these legislations and peruse litigation in relation to these laws.


E. Drafting of Legal Document
1. 1 There are various documents which are drafted by legal officers of owned legal department of a company or business for instance lease agreements, service contracts, provision of goods contract ,share purchase agreements and contracts for the purchase of property.

2. There are some other contracts which should be also reviewed by legal department these contracts included employment contracts, provision of service contacts and business agreements.

3. There are some statutory document in which continuous amendments are often made for instance Memorandum of Association, Article of Association and Prospectus of the company. These amendments should be incorporated and reviewed by the legal department.

F. Litigation

Litigation is the most important function of legal department. There are many situation in which a organization goes in court and appellate benches for instance trade mark violation, breach of contracts, misconducts by the employees of regulators

1. Preparation of all case documentations.
2. Court appearance.
3. Preparation of petitions and applications.
G. Regulators
In Pakistan there are many regulatory bodies legal department is responsible for correspondence with these regulators and make sure compliance to the statutory requirements of regulators. In Pakistan major regulators are as follows

a. Securities and Exchange Commission of Pakistan
b. Federal Board of Revenue
c. National Electric Power Regulatory Authority (NEPRA)
d. Oil and Gas Regulatory Authority (OGRA)
e. State Bank of Pakistan
f. Pakistan Electronic Media Regulatory Authority (PEMRA)

H. Miscellaneous Legal Requirements

There are many legal matters and legalities which should be looked after by legal department.
1. Environmental laws
2. Ministry of Health announcements and orders
3. Ministry of Labours’s orders

Awais Aftab


- moon2005 - 02-03-2010

Sir Awais Aftab

Sir you have really increased my knowledge. I did not know the purposes of legal and corporate department.