Who decide number of Director at time of incorporation in Pakistan

Who decide number of Director at time of incorporation in Pakistan

At the time of incorporation the subscriber to the memorandum (creating company) decided number of director. Term of such directors; normally continue till first general meeting of shareholder, in which number of director is to be decided.

How many Directors for company in Pakistan

How many Directors for company in Pakistan?

Companies law specify minimum and maximum number of director, while the exact number of director a company should have is written /decided by the articles of association. It is important to remember that number of director also depend on the nature of company

1.    Single member Company (One Director)

2.    Private Company ( Minimum director two)

3.    Public Limited Company   (Minimum three Director)

4.    Listed Company  (Minimum Seven Directors )

Companies’ law does not specify maximum number of directors for companies.

What is Basic composition of Board of Directors in Pakistan

What is Basic composition of Board of Directors in Pakistan?

Basic composition of Director means maximum and minimum number of director for a company. Basic composition of director depends on the nature of company. Different country has different basic composition. Basic composition of director is given in the companies law or act or other relevant law.

Who Decide Composition of Board of Director in Pakistan

Who Decide Composition of Board of Director in Pakistan

Basic Composition of board of director i.e. maximum and minimum number of director is normally decided by the regulator, corporate law of the country. Specific number of Directors is decided either by memorandum of association, articles of association or board of directors.

In Pakistan board of Director composition is decided as follow;

·         Minimum number of Director is given or decided by law

·         Number of first Director is decided by subscriber to memorandum subject to law.

·         Number of subsequent Director by first Director subject to law.

Fixed Installment Loan Calculation

Fixed Installment Loan Calculation

Fixed installment loan installment can be calculated by dividing the loan amount by the annuity factor.  This would provide us the equal cash outflows (loan installment).

Fixed Installment Loan Calculation Example

Mr. Saleem is planning to take 1 million $ from a bank. Interest rate is 12% and term of loan is 5 years, what would be yearly installment.

Solution

In first place we would calculate, the annuity factor, and then we would divide the loan amount by the annuity factor.

1.    Annuity Factor

Annuity Factor= 1-(1.012)^-5

                           .12

Annuity Factor = 3.60

2.    Fixed installment

Annual installment = 1,000,000/ 3.60

277,777 – Yearly installment

Total Market Value from Equity & Debt

Total Market Value from Equity & Debt

Total market Value of entity may be calculated from the market value of debt and market value of equity. Total market value is calculated by simply adding market value of Debt & Equity.

Vt= Ve + Vd

Vt= Total Market Value

Ve= Market Value of equity

Vd= Market Value of debt

Total Market Value from Debt & Equity Example

XYZ Company market value of equity is 50 million, while market value of debt is 35; total market value has been calculated for XYZ as under.

Vt= Ve+Vd

Vd= 50+ 35

Vd= 85 (Total Market Value)

Market Value of Debt from Market Value of Equity

Market Value of Debt from Market Value of Equity

Market Value of debt can be calculated from the relationship between Total value of entity, market value of debt and market value of equity. This relationship has been explained by following formula

Vt= Ve + Vd

Vt= Total Market Value

Ve= Market Value of equity

Vd= Market Value of debt

Market Value of Equity Example

ABC Company has current value of 350 million, equity market value is 100, calculate debt market value?

Vd= Vt-Ve

Vd= 350-100

Vd= 250 (Market value of equity)