A modaraba company registered under the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 shall apply to the Registrar of Modarabas, in Form 1 and with such documents as may be prescribed, for permission to float modaraba.
An application for floatation of modaraba shall be accompanied by a prospectus which shall contain, inter alia, the following information, namely;
- the name and type of the modaraba;
- the conditions and amounts of the modaraba to be floated and the division thereof into Modaraba Certificates of fixed amount;
- the business scheme, prospectus and mode of distribution of profit;
- the amount to be subscribed by the modaraba company to the modaraba in its own name supported by evidence about its ability to meet the commitment;
- the form of the Modaraba Certificate; and
- such other matters as may be prescribed.
The application, the prospectus and the documents filed therewith shall be authenticated by all the directors of the company.
Business of Modaraba
No modaraba shall be a business not in conformity to the injunctions of Islam and the Registrar shall not permit the floatation of a modaraba unless the Religious Board has certified in writing that the modaraba is not a business opposed to the injunctions of Islam.
The Registrar may, after obtaining from the Religious Board a certificate to the effect that the modaraba is not a business violating the injunctions of Islam and on being satisfied that it is in the public interest so to do, grant a certificate in the prescribed form authorising the floatation of modaraba on such conditions as he may deem fit, including conditions as to the business to be undertaken, expenses relating to the management of the Modaraba Fund, preservation of assets and other matters relating to the mode of management and distribution of profits:
Provided that, before issuing the certificate of authorization, the Registrar may require the modaraba company to make such modifications, additions or omissions in the prospectus as the Religious Board may have indicated or as he may deem fit.