CAF-4 · Chapter 16 · Question 8 of 10
A newly formed welfare society wishes to be registered as a company but wants to avoid using the word 'Limited' at the end of its name. Under what condition will the Commission grant a license to an 'Association not for profit'?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) If it applies its profits solely in promoting its objects and prohibits the payment of any dividend to its members.
Explanation
An association not for profit is granted a license by the SECP provided it applies its profits in promoting its objects and expressly prohibits the payment of any dividend to its members.
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