Making corporate laws more meaningful: KTBA urges SECP to materialise its Recommendations

Karachi Tax Bar Association (KTBA) has urged the Security and Exchange Commission of Pakistan (SECP) to materialise its recommendations to make the corporate laws more meaningful and relevant in the light of best practices. In a statement issued here on the other day.
The KTBA said that several issues were raised by the participants at a workshop on corporate laws, which was organised in collaboration with SECP on December, 10 2011. These issues, which were also presented before chairman SECP during his presence at the concluding session of the workshop, are as follow:
---- As per the instruction of Ministry of Interior regarding the foreign Director or shareholder of company the SECP will ensure the timely clearance of the foreigner.
---- In the Ordinance it is not clear that how a company as a shareholder can nominate a person as a director on its behalf in the board of directors of the company. The Companies Ordinance should allow increase in number of directors before the election of directors.
---- There must be provision in the Companies Ordinance for the conversion of Public Company into NPO u/s 42.
---- Condition should be waived for members to deposit the money in case of Non-Profit Association u/s. 42 of the Companies Ordinance, 1984.
---- Rationalise of penal provisions in case of Non-Profit Association.
---- The Provision for unpaid shares/uncalled shares be omitted from Companies Ordinance as the urgent is only for fully paid up is operative.
---- Make easy exit scheme permanent part of Ordinance for inactive companies.
---- Provision shall be inserted for refund of fee wrongly deposited.
---- SECP should negotiate with FBR the rate of tax in case of single member company and small companies from the prescribed rate of AOP and threshold to become withholding agent should be at par with AOP.
---- The Dispute Resolution mechanism should be inserted under the Companies Ordinance to minimise the litigation. In view of these recommendations, the KTBA has requested to the authority to ponder the same at earliest with the aim to address the problems being faced by the corporate sector.-PR