Without making much noise on the news front, the Senate, on Sunday, made introduced some adjustments to the Companies Act 2017. The new act, passed with unanimous consensus, is meant to replace the existing Companies Ordinance 1984, which has been in place for the last 33 years.
National Assembly has scheduled a session on Friday for the approval of the act to be made a law. Once approved, the Prime Minister will requested the President of Pakistan to sign the act into the law next week for implementation.
The Act has been added with three new amendments which will define consequences for violators of the law. The Companies Act 2017 will decrease the flexible powers awarded to the Security Exchange Commission of Pakistan (SECP) on a large scale.
The new Act encourages more autonomy for the corporate managers, i.e. commencing instant meetings of the Board of Directors General. Moreover, it will also simplify the procedure of merger of companies and exemption of forbidden companies.
SECP’s new roles and responsibilities
SECP will be have a new set of responsibilities under the Companies Act 2017. These new set of duties include:
- Verification of Sharia sector
- Real estate registration
- Authorization of merger of companies
In addition, it also makes it mandatory for all the overseas Pakistanis – holding nationality or occupation – to declare all their assets and liabilities before the SECP, and register their companies in accordance.
SECP will be responsible for handling the real estate sector. When the National Assembly approves the new Act, no real estate firm would be allowed to promote new projects or book new plots without the SECP authorization.
Securities and Exchange Commission will be responsible for reporting of such information, maintenance of the Global Register of Beneficial owners as a combined record and delivering record copies to the FBR and other related organizations.
Once the new Act is passed, the Anti-Money Laundering Act 2017 will also be put into action. Under this Act, all the heads of all companies will be responsible for keeping an eye on money-laundering.
The status of watchdog granted to SECP will assist in playing a vital role in investigations. Through these powers, SECP can stop fake real estate deals, secure investor’s welfare, and support legitimate projects of estate agencies.
Additionally, practicing Islamic banking will be forbidden without ensuring SECP’s new protocols. According to the Act, a Pakistani living abroad, having Pakistani passport, owning shares or any company would be responsible for forwarding a shares report.
For the first time, the Parliament has advised major firms to have at least one female director on their board. The have also insisted on reserving a 2% quota for special people.