The Senate Standing Committee on Finance, Revenue, Economics Affairs, Statistics and Privatisation has approved the Companies Bill, 2017, after proposing certain important changes. The bill, which is meant to replace the Companies Ordinance, 1984, was passed by the National Assembly on February 6, 2017.
The committee convened nine sessions to discuss the bill, clause by clause and after detailed deliberations; agreed upon and proposed certain changes. The proposed changes aim to empower women, enhance rights of disabled people and ensure the ease of doing business. The bill, along with the amendments will soon be placed before the Senate for a review.
The major changes proposed by the committee include provisions for a mandatory presence of a female member on the board of companies to be notified by the SECP. The procedures regarding the signing of statutory returns and making changes in the memorandum of association of the company have been simplified. The provision for winding up of companies by the courts has been rationalised as well. Further, any major change in the shareholding of the company shall be reported to the SECP in an expeditious manner.
The mechanism has been introduced to enable companies to indemnify their officers through insurance cover. The SECP has been empowered to increase the limit of paid-up capital beyond ten million rupees for mandatory filing of audited financial statements by the private company. Every public interest company, which has 50 or more employees, will be required to hire two percent, disabled individuals.
The bill intends to encourage and promote corporatisation in Pakistan based on the best international practices. It contains provisions including; simplifying the procedure for incorporation of companies, enabling maximum use of technology, as well as encouraging paperless environment at all levels and relaxations to small and medium enterprises.
The law will facilitate the growth of the economy in general, and the corporate sector in particular by providing a simplified procedure for ease of starting and doing business, greater protection of investors and augmenting corporatisation in the country.
The SECP chairman thanked the Senate, National Assembly and the members of the Standing Committees for the time spent on review and value addition in the bill. He also congratulated the nation on this historic moment, where the corporate law has been revamped to bring it on a par with international jurisdictions after a long period of 33 years. He expressed the hope that this would be a game changer for Pakistan’s economy.
