Defunct private, public non-listed companies: Procedure for de-registration issued

ISLAMABAD: The new Companies Regulations, 2022 has issued a detailed procedure of de-registration for the defunct private and public non-listed companies including associations not carrying out any business activities.

Under the draft of the Companies Regulations 2022 issued by the Securities and Exchange Commission of Pakistan (SECP), the procedure shall apply to defunct private and public non-listed companies including associations not for profit licensed under section 42 of the Companies Act, 2017, which are not carrying on business and are not in operation and desirous to strike their names off the register of companies.

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This procedure shall not apply to the following companies— (i) subsidiaries of listed companies; (ii) foreign companies; (iii) trade organizations licensed under the Trade Organization Act, 2013, (II of 2013); (iv) companies which have liabilities outstanding in relation to any loan obtained from the banks or financial institutions, taxes, utility charges, or any obligations towards government departments or private parties; (v) companies against which investigations, enquiries or inspections are either pending or are in the process of initiation or any matter/prosecution is pending before the court or any other competent authority/forum; (vi) companies having dispute regarding management or shareholding; (vii) companies found involved in illegalities or fraudulent activities; (viii) housing and real estate development or real estate marketing companies; and (ix) companies involved in soliciting public deposits and repayment thereof or delivery of promised goods or services there against is yet not completed.

Under the procedure, the “defunct company” includes a company which has no known assets and liabilities; and is not carrying on any business and is not in operation.

Where a defunct company desirous to strike its name off the register of companies, may file with the concerned registrar an application on specified format App-4, the SECP said.

The public company and its subsidiary, and private company having paid up capital of three million rupees or more shall furnish the certificate from a chartered accountant within the meaning of the Chartered Accountants Ordinance, 1961.

Where an application received is made by a company formed or operating under any licensing regime, or which has been granted approval, registration or enrolment by any authority or entity, such application shall be accompanied with no objection certificate from that respective authority or entity.

Where an application received is made by a public sector company as defined in Public Sector Companies (Corporate Governance) Rules, 2013, such application shall be accompanied with no objection certificate or approval from controlling Government, any instrumentality, or agency of Government or statutory body, as the case may be, and such further information as the Commission may deem fit.

Where no objection or reservation is received, and the registrar is satisfied that the applicant company has no known assets and liabilities, and is not carrying on any business, on the expiration of 90 days, the registrar shall strike off the name of the applicant company from the register and send notice for publication in the Official Gazette and on publication thereof the applicant company shall be dissolved, the SECP added.

Copyright Business Recorder, 2022