NA approves Companies Bill 2017

ISLAMABAD: The National Assembly on Monday approved the Companies Bill 2017 to revamp the Companies Ordinance 1984, which was the need of the hour to ensure a growing and robust corporate sector in the country, a statement said.

National Assembly speaker Ayaz Sadiq, and parliamentarians Dr Nafisa Shah and Dr Azra Fazal Pechuho praised finance minister Ishaq Dar and Securities and Exchange Commission of Pakistan (SECP) chairman Zafar Hijazi for revising the company law in such a short time, SECP said in a statement.

Earlier, the subcommittee formed by the standing committee discussed the reservations received on the Companies Ordinance, 2016 from different quarters, including the corporate sector and the media, in its five meetings held on 5th, 10th, 11th, 17th, and 18th January, 2017.

The same were placed before the standing committee in its 46th meeting on January 26, 2017.  A total of 50 amendments were proposed by the committee in its report to the National Assembly made on January 27, 2017.  During the deliberations made on the floor, it was desired by the members to undertake a clause by clause reading of the Companies Bill. Accordingly, the committee started this exercise on February 1, 2017 in a meeting held at the SECP head office, followed by back to back meetings on 2nd, 3rd and 6th February, 2017.

In the final session held on February 6, 2017, the committee recommended with mutual consent 23 amendments. The committee members contributed to make the existing provisions clear and unambiguous.

The commission took all the proposed amendments positively and relevant amendments have been made to make the intent of the legislation clear. The new law proposes various facilitative business measures relating to ease of doing business and investor facilitation on the one hand, and providing for stringent enforcement powers, anti-fraud measures, etc on the other.

The measures for ease of business include ease in incorporation of new companies and less filing requirements. Companies with a paid-up capital up to three million rupees are not required to file return if there is no change in the particulars.

The concept of inactive company has been introduced, which will provide flexibility to the owners to keep the company alive with no compliance requirements during the inactive period. Companies with a paid-up capital up to Rs1 million are not required to get the financial statements audited.  The concept of decision by circular resolution has been introduced for ease of operation of companies. Alternative dispute resolution mechanism has been provided in the law, which will assist companies to use these forums without paying hefty legal fees in lesser time.  Amalgamation and merger has been eased by allowing the amalgamation of wholly owned subsidiaries in holding company without formal approval.