ISLAMABAD: The parliament on Wednesday approved three bills of the Securities Exchange Commission of Pakistan (SECP), including the Companies (Amendment) Bill, 2021, which proposes to promote startups, business innovation, entrepreneurship, and improve general business climate and promote ease of doing business (EoDB).
The bill will now be tabled in the Senate.
As per the details, the joint sitting of parliament also approved the Secure Transactions Act (Amendment) Bill as well as the Corporate Restructuring Companies (Amendment) Bill.
The amendment allows special privileges to be granted to startup companies engaged in technology-enabled products and services and are estimated to be the backbone of the economy going forward.
Similarly, private companies were allowed to issue shares other than cash, while all companies were allowed to issue employees stock option schemes and buy back their shares; earlier this was restricted to public and public-listed companies.
In addition, private companies having paid-up capital up to Rs1 million are exempted from filing of unaudited financial statements.
To protect minority shareholder’s rights, discovery of any documents from the defendant during court proceedings is allowed whereas the threshold for member resolution has been proposed to be reduced from 10 per cent to 5pc.
Other important amendments include board resolution through circulation that is required to be signed by all directors. The proposed amendment allows that board resolution through circulation approved by all directors shall be valid. However, keeping in view the recommendation of BoI (PRMI) and similar practice in other jurisdictions, it is proposed that board resolutions approved by the majority of directors may be considered valid.
To meet benchmarks of the World Bank’s ‘Women, Business and Law’ report, additional requirements to mention husband’s name by a married woman or widow for registration of a company have been proposed to be abolished.