Laws cover foreign firms operating in Pakistan
ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has issued a new regulatory framework for companies including foreign firms operating in Pakistan covering areas of registration, maintenance of records, monitoring of foreign funding, compliance/reporting, filing of documents and payments of fees by the corporate sector.
The SECP has notified SRO 1119 (I)/2022 to issue the draft of the Companies Regulations, 2022 for the corporate sector.
Under the Companies Regulations, 2022, the SECP has issued a procedure for the reservation of names for the new companies.
The SECP has also specified a list of prohibited names for the corporate sector.
In case a company changes its name, by passing a special resolution, it may file an application to the registrar to change its registered name.
In case a foreign company changes its name in the country of origin, it may file an application to the registrar to change its registered name subject to compliance with the requirements, SECP said.
For the incorporation of new companies, an applicant shall make separate application for incorporation of company either online through e-service or in physical form to the registrar as per form-1 along with the specified documents.
The Commission shall obtain prior security clearance in accordance with policy approved by the government in respect of foreign funding or donation or foreign promoters, foreign directors, or foreign chief executive officer of applicant seeking license under these Regulations.
The Company, subsequent to grant of license, shall obtain prior security clearance through an application made to the Commission in case it intends to receive foreign funding or donation; or induct foreign member; or appoint foreign director or chief executive officer.
The SECP has also mentioned conditions for issuance of shares with different rights, issuance of shares with different rights and conditions for issue of Employee Stock Option Scheme.
As per Companies Regulations, 2022, the memorandum of association shall contain an undertaking that the company shall not engage in any of the restricted business, launch multi-level marketing (MLM), Pyramid and Ponzi Schemes, or other related activities/businesses or any lottery business, or engage in any of the permissible business unless the requisite approval, permission, consent or license is obtained from competent authority as may be required under any law for the time being in force.
The SECP has also issued details for the establishment of Company Registration Offices in different cities of the country.
The new regulations revealed that on registration of memorandum of association of a company, the registrar shall issue a certificate of incorporation, under his signatures or authenticated by his official seal, as per Annexure-C, which shall be conclusive evidence that the requirements of the Companies Act as to registration have been complied with and that the company is duly incorporated.
In case the subscriber is a foreign company or a foreign body corporate, the registrar shall require additional information including but not limited to the profile of the foreign company or foreign body corporate, detail of its directors, their nationality and country of origin, copy of its charter, statute or memorandum and articles, copy of the certificate of incorporation, Board resolution by the foreign company for appointment of nominee and authorization to acquire shares in the proposed company, an undertaking on the specified format as per Annexure-S duly attested by notary public, etc, SECP said.
The SECP has also issued a separate procedure for the maintenance of records of ultimate beneficial owners of foreign company.
Copyright Business Recorder, 2022