Wednesday May 17, 2017
ISLAMABAD: The upper house of the parliament, on Sunday, introduced necessary amendments to the Companies Act 2017 and passed it with consensus, which will replace the 33-year old Companies Ordinance 1984.
The legislation now awaits the National Assembly approval during its session scheduled on Friday. The president of Pakistan, on the advice of prime minister, will sign it into the law next week, following which it will become active immediately.
Three new slabs introduced in the new Act will award a penalty to law violators. The Companies Act 2017 reduces the discretionary powers of the Security Exchange Commission of Pakistan (SECP) to a large extent.
The new Act provides more room to corporate managers to conduct their affairs with more ease, e.g. holding of swift meetings of the Board of Directors General. The process of merger of companies and de-registration of banned companies will also become easier through the new Act.
The Companies Act 2017 provides completely new responsibilities to the SECP, including authentication of the Sharia sector, certification of real estate, and approval of companies' merger.
For all Pakistani's living abroad — nationality holders or residents —, the declaration of all of their interests in the US, Europe, Gulf or any foreign country before the SECP and the registrar of companies would be mandatory following the implementation of the new Companies Act 2017.
The real estate sector will be handed over to the SECP. After the passage of the new Act by the National Assembly, the real estate companies would not be able to advertise new projects or book plots without the SECP approval.
The SECP will be bound to bring on record all such information, maintain the Global Register of Beneficial Owners as a centralised record, and provide copies of the record to the FBR and other concerned agencies.
Officials of all companies will be bound to check money-laundering, under the Anti-Money Laundering Act 2017, once the new legislation is implemented.
SECP will be granted the watchdog status, so it could play a crucial role in investigations. It will be empowered to block the businesses of fake real estate agents, safeguard the interests of investors, and help promote legal real estate projects.
Moreover, no company would be allowed to practice Islamic banking without following SECP's new regulations.
Under the new Act, a Pakistani with dual nationality, a person with Pakistani passport living in any country of the world, owning shares of a Pakistani or foreign company and company directors would be liable to submit a shares report.
The Parliament, for the first time, has made large companies to have at least one female director on their board as a social obligation, and reserve a two percent quota for differently abled people.