YOUTUBE: https://www.youtube.com/watch?v=6u57fZM8Mlk
Guide on Company Secretarial Practice
COMPANY LAW - PROCEDURES - PRACTICES
CONTENTS
• Commentaries on the Companies Act, 2017 supported with the SECP’s Regulations, Rules etc., Listed/Non-Listed/Public Sector Companies (Code of Corporate Governance), CSR,
• Formation, incorporation, registration, memorandum, articles;
• Prospectus/Abridged, IPOs, E-payment-subscription money, electronically issuance of debenture, redeemable capital, debt securities, discount, premium Buy-back, Right, Bonus of shares, reduction of capital, listing on PSXs’ etc.
• Meetings, statutory, BODs, AGM, EOGM, Notice, Resolutions,
• Directors/independent/executive/female, CEO, CFO, Secretary their appointment, election, removal, duties, accountabilities,
• Books of accounts of Companies, Modarabas, financial statements, directors’ report, disclosure requirements, IFRSs,
• Dividends, E-payment, unclaimed dividends and certificates;
• Auditors, their appointment, qualification, rights, duties, report;
• Conversion of Cos, licensing of NPOs, Foreign Funding’s,
• Shariah compliant Companies/Securities, Shariah Accounting,
• Export Zones, Investment Association/Offshore, FDIs,
• Offences of fraud, AML/CFT/FATA requirements/regulations;
• Foreign companies, establishment of their places of business in Pakistan.
• Filing of Forms and General Rules, Fee etc.
CONTENTS IN DETAIL
CHAPTER-1 : POWER AND FUNCTIONS OF THE SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN
• Powers and functions of the Commission
• Establishment and objectives of SECP
• Securities and Exchange Commission of Pakistan Act, 1997
CHAPTER-2 : INCORPORATION OF COMPANIES AND MATTERS INCIDENTAL THERETO
• Obligation to register certain associations, partnerships as companies
• Limitation of formation partnership, association
• Exception for application of this section
• Different forms of businesses.
• Choice of forming a company.
• Limited Liability Partnership (LLP)
• Procedure for constitution of LLP
• Update Particulars of Ultimate Beneficial Owner
• Procedure for registration of LLP
PROVISIONS WITH RESPECT TO NAMES OF COMPANIES
• Prohibition of certain names
• Companies (Incorporation) Regulations, 2017
• Manner to file combined application
• Letter of availability of name
• Cancellation of name reserved.
• Refusal of availability of proposed name.
• The words specified are prohibited.
• SECP centralizes functions for approving application
• Rectification of name of a company.
• Registrar may register new name.
• Liability of penalty.
• Change of name by a company
• Procedure for change of name of a company
• Documents to be filed with the registrar
• Registration of change of name and effect thereof
• Change of name will have no effect
• No approval is required for change of name
CHAPTER-3 : MODE OF FORMING COMPANY & TYPES THEREOF
• Types of companies.
• Classification of companies
• Procedure of registration of companies
• Distinction in different companies.
• Prior approval for registration of certain companies
• Modes of application for incorporation of companies.
• Procedure to register a company
• Public Sector Company
• Liability for carrying on business by less than required minimum members
CHAPTER-4: GENERAL PROVISIONS WITH RESPECT TO REGISTRATION OF MEMORANDUM AND ARTICLES
• Registration of memorandum and articles.
• The documents require to be filed.
• Revision of the documents.
• Refusal of registration of the company.
• An appeal against the order of refusal for registration.
• Registration of the Memorandum.
• Certificate of Incorporation
• Combined procedure for receiving name and incorporation of a company
• Conditions and contents of memorandum.
• Article of Association (AoA).
• Option to adopt AoA or Table A
• Effect of memorandum and AoA.
• Ultimate Beneficiary Owners.
• Effect of registration of a company.
• Company becomes legal entity on registration.
• Basic features-incorporate limited company
• Procedure for incorporation of Private Company.
• One window facility for registration a company.
COMMENCEMENT OF BUSINESS BY A PUBLIC COMPANY
• Requirements for Commencement of business by a public company.
• Business may be commenced by Pvt. Co.
• Commencement of business by a public company
• Procedure for commencement of business
• The company may proceed for commencement of its business
• Certificate of Commencement of Business
• Consequences of non-compliance of S.19.
CHAPTER-5 : REGISTERED OFFICE AND PUBLICATION OF NAME.
• Registered office of company.
• Purpose of having registered office.
• Change of situation of registered office under Companies (Registration Offices) Regulations, 2018
• Procedure for change of registered office
• Penalty for non-compliance.
• Publication of name by a company.
• Display of a name of company.
• Company to have common seal. (Omitted)
• Penalties for non-publication of name
• Publication of authorized as well as paid-up capital
CHAPTER-6 : MEMORANDUM AND ARTICLES OF ASSOCIATION OF DIFFERENT COMPANIES.
• Business and objects of a company.
• The term principal line of business re-defined.
• Business prohibited.
• Change in principal line of business
• Secretarial Functions.
• Memorandum of a company limited by shares.
• Contents of MoA
• Principal line of business covers all lawful businesses.
• Object Clause in memorandum association.
• Classes of share / capital.
• Memorandum of company limited by guarantee
• Memorandum of unlimited company.
• Borrowing powers to be part of memorandum
• Memorandum to be printed signed/dated.
• Alteration of memorandum.
• Procedure for alteration in memorandum.
• Petition for alteration of memorandum.
• Powers of Commissioner when confirming alteration.
• Exercise of discretion by Commission.
• Effect of alteration in memorandum AoA.
ARTICLES OF ASSOCIATION (AoA)
• Registration of articles.
• AoA of a company limited by shares
• AoA of a unlimited or a company limited by guarantee
• AoA of every company
• Requirements of an AoA.
• Limitations for alteration of AoA/MoA.
• Distinction between Memorandum and AoA.
• AoA of a private company.
• Articles to be printed signed and dated.
• Alteration of articles.
• Copies of MoA and AoA to be given to members.
• Alteration of memorandum or articles to be noted in every copy
• Form of memorandum and articles.
• Memorandum vs. Articles of Association
CHAPTER-7 : LICENSING OF ASSOCIATION WITH CHARITABLE AND NOT FOR PROFIT OBJECTS (NPO).
• Licensing of association with charitable and not for profit objects.
• Objects of formation of a NPO
• Requirements for formation of NPO
• Procedure for incorporation of NPO
• Foreign promoters
• Profit and other income of the association
• Application for renewal of license.
• Commission may renew the license.
• Commissioners’ powers to revoke license
• Association with charitable and not for profit objects Regulations, 2018.
FOREIGN FUNDINGS-NPOs:
• Foreign funding’s, donations, contributions etc.
• From foreign sources
• SECP tightens rules for foreign funding’s etc
• Prior permission requires from SECP for acceptance of donations etc. from foreign source
• Laws to regulate INGOs/NGOs receiving foreign contribution
• Association with Charitable and Not for Profit Objects Regulations, 2021
• Donations from foreign sources are prohibited
• Security clearance of foreign donors.
• Anti-Money Laundering/Countering the Financing of Terrorism Guidelines for NPOs, 2018
• FATA’s recommends
• Licensing procedure
• Grant of license by the Commission
• Effect of revocation of license.
• Consequences of revocation of license.
• Penalty.
• Provision as to companies limited by guarantee.
• Right to participate in divisible profit void
• SECP issued updated guidelines for NPOs.
• Issuance license is necessary.
• Appointment of an administrator.
• The members are not eligible to hold office
• NPOs be registered self-deregulatory entities
• Self-Regulatory Organization (Registration) Regulations, 2021
• Right to divisible profit.
• Guarantee of an agreed amount.
• Reserve capital.
CHAPTER-8 : CONVERSION OF A COMPANY OF ANY CLASS INTO A COMPANY OF OTHER CLASS AND RELATED MATTERS.
• Conversion of public company into private company and vice-versa
• Conversion of private company into public company.
• Altered memorandum and articles.
• Conversion of status of private company into a single-member company vice-versa.
• Approval of the Commission
• Altered of AoA by a Single Member Company
• Conversion of status of unlimited company as limited company and vice-versa.
• Procedure for such conversion
• Conversion of a company limited by guarantee to a company limited by shares and vice versa
• Issue of certificate and effects of conversion
• Conversion shall not effect.
• Application for conversion of status of
• Power of unlimited company to provide for reserve share capital on conversion of status to a limited company
• Consequence of default in complying with conditions constituting a company a private company.
• Ceased to be a private company.
• Waiver of the consequences by the Commission
CHAPTER-9 : SERVICE AND AUTHENTICATION OF DOCUMENTS.
• Service of documents on a company.
• Service of documents on Commission or the registrar
• Service of notice on a member.
• Notice in case of death or insolvency.
• Circulation of reports and notices by companies.
• Authentication, documents and proceedings.
• Maximum fees to be charged by companies.
CHAPTER-10 : PROSPECTUS, ALLOTMENT, ISSUE AND TRANSFER OF SHARES AND OTHER SECURITIES
Issue of IPO, e-refund of subscription money, listing on PSX
• Prospectus.
• Meaning of prospectus under The Security Act, 2015,
• Process of share issue
• Time for issuance of prospectus.
• Issuance of prospectus
• Making calls of shares.
• Issue of prospectus by foreign company u/s 446
• Restriction on canvassing for sale of securities u/s 447.
• SECP revamps public offering framework.
• Initial Public Offering (IPO) Regulations, 2017.
• SECP approves Growth Enterprise Market (GEM) Listing Regulations
• Public Offering Regulations, 2017.
• SECP may revise Security Act, 2015
• DFIs in underwriting business to submit affidavit
• Role of consultant to the issue.
• Role of underwriter
• Conditions for listing Initial Public Offer
• Remedies available to the allottees.
• Directors not liable for mis-statement.
• Contravention is liable for penalty.
• Abridged Prospectus
• E-IPO System
• Digital transforming the IPO through e-IPO System
• PSX’s e-IPO System (PES)
• Centralized e-IPO System (CES)
• Approval etc. by the PSX
• Refund of Application Money
• Public Offering (Regulated Securities Activities Licensing) Regulations, 2017
• SECP to start concept of direct listing of companies
• Classes and kinds of share capital.
• Director’s powers to issue share capital.
• Kinds and classes of share capital
• Right shares.
• Variation of shareholders’ rights.
• Shareholder’s rights
• Member of a company
• Aggrieved member apply to the Court.
• Order of the Court.
SHARE CAPITAL AND NATURE, NUMBERING AND CERTIFICATE OF SHARES
• Numbering of shares.
• Prohibition on issuance of bearer shares or bearer share warrants etc.
• Nature of shares or other securities.
• Share certificate to be an evidence of title of the shareholders
• Concept of Special Purpose Acquisition Company (SPAC)
CHAPTER-11 : SPECIAL PROVISIONS AS TO DEBENTURES, REDEEMABLE CAPITAL, AND CONVERTIBLE DEBT SECURITIES
• Issue of debentures.
• Chief features of debentures.
• Kinds of debentures.
• Issuance of debentures.
• Debenture trust deed.
• Shareholders Vs. debenture holders.
• Other debt instruments
• Structuring of Debt Securities Regulations (DSR)
• Convertible Debt Securities (CDS)
• Payment of certain debts out of assets subject to floating charge in priority to claims under the charge
• Secured debentures.
• Preferential payments.
• Powers and liabilities of trustee.
• Trustee has right to sue.
• Court stays order.
• Trustee has right to sell the mortgaged property.
• Provision of exempting trustee is void.
• A trustee is entitled to the benefit.
• SECP revised functions and duties of Debt Securities Trustees
• Issue of securities and redeemable capital not based on interest.
• SECP specifies the persons to whom redeemable capital may be issued
• SECP has specified the instruments of redeemable capital
• Agreement’s terms of redeemable capital
• The term ‘redeemable capital’ defined.
• The term ‘Sukuk” explained.
• The Private Placement of Securities, Rules 2017
• Guidelines for issuance of Gender Bonds
CHAPTER-12 : ALLOTMENT
Shares and debentures, refund of application money, listing on PSX
• Application for, and allotment of Shares and debentures
• The term ‘allotment’ explained.
• Procedure of allotment of shares
• Allotment once made can’t be cancelled.
• Time of allotment of shares or debentures
• Repayment of money received for shares not allotted
• Refund to unsuccessful applicants.
• Director’s liability to refund.
• Directors are responsible for allotment.
• Post-issue actions
• Allottees’ rights.
• Allotment of shares and other securities to be dealt on securities exchange.
• Permission application to PSX
• Deposit of application money.
• Underwriting
• Refund of money by the company.
• Listing on PSX
• Return as to allotment.
• Shares allotted as paid-up in cash.
• Shares allotted otherwise than cash.
• Shares paid in cash explained.
• Extension of the time for filing return.
• Subscribers of memorandum-exempted.
• Penalty for non-compliance.
• This section applies to the bank.
• Banks/DFI shall file return in case of company makes default
CERTIFICATE OF SHARES AND OTHER SECURITIES:
• Limitation of time for issue of certificate.
• The term ‘share certificate’ defined.
• Forfeiture of shares.
• Issuance of share in book-entry form.
• Issue of certificate of shares
• Procedure of placing of shares in book-entry form.
• SECP’s advise to conversion of physical shares Into Book-Entry Form
• Issue of duplicate certificate.
• Company may refuse to issue duplicate certificate.
• Liability of the company and its officers.
TRANSFER OF SHARES AND OTHER SECURITIES.
• Transfer of shares and other securities.
• Procedure for transfer of shares
• Limitation to complete transfer.
• Conversion of shares into book-entry.
• Transfer on the security exchange.
• Transfer deed lost or destroyed.
• Maintenance of records of transfer.
• Blank transfer of shares.
• Transfer and Transmission of shares may be distinguished
• Forged transfer.
• Board not to refuse transfer of shares.
• Transfer of shares in case of a private company.
• Restriction on transfer of shares by the members of a private company
• Procedure of selling of shares of a private company.
• Notice of refusal to transfer.
• Transfer to successor-in-interest.
• Transfer to nominee of deceased member.
• Nomination for protestation of right of legal heirs.
• Transfer of shares to nominee of the deceased member
• Appeal against refusal for registration of transfer
• Right for refusal of transfer not to be arbitrary.
• Penalty for non-compliance.
CHAPTER-13 : COMMISSION, DISCOUNT & PREMIUM
Issuance of shares at premium, discount, further issue of capital, employee stock option.
• Application of premium received on issue of shares
• Conditions for issuance of shares at premium
• The share premium account.
• New class of capital.
• Power to issue shares at a discount.
• The Commission shall not sanction.
• The directors are required to subscribe.
• Sanction of the Commission is necessary.
• Issuance of shares at discount, not reduction of capital
• Particulars of discount on shares to be published.
• Penalty
• Powers to issue shares at discount
• Further issue of capital.
• Procedure for increase of share capital.
• Employees Stock Option.
• Issuance of shares for cash or otherwise.
• Circular to be issued.
• Offer letter to be furnished to the registrar
• Conversion of loan into shares.
• Notice of increase of share capital.
• Issuance of bonus shares and related matters.
• Issuance of Right shares and related matter thereto
• Payment by non-resident Pakistani.
• Acceptance of right shares offer.
• Companies Share Capital (Variation Rights and Privileges) Rule, 2000
• BOD cannot rise of capital beyond authorized capital.
• The director’s obligations.
• Public Companies (Employees Stock Option Scheme) Rule, 2001.
• SECP enables Startups to offer ESOP Plan.
• Conditions for directors to offer shares.
• Conditions for issue of ESOS.
• SECP’s guidelines for issuance of convertible debt securities
• In the case of Private Placement
• In the case of public offering
• The Private Placement of Securities Rules, 2017
• Companies (Further Issues Shares) Regulation, 2020
• The powers of the Commission and officers
CHAPTER-14 : INVITATION OF DEPOSITS
Prohibits purchase by company its own shares, giving loans, subsidiary not to hold in its holding company.
• Prohibition on acceptance of deposits from public
• The term ‘deposit’ explained.
• A company is punishable.
• Power of company-alter its share capital.
• Objects for alteration in memorandum
• Rights of the members to be protected
• Prohibition of purchase by company or giving loans by it for purchase of its shares
• Subsidiary company not to hold shares in its holding company
• The term ‘subsidiary company’ defined.
• The cases where restriction shall not bar a subsidiary company
• Power of a company to purchase its own shares.
• Conditions for holding shares
• Buy back of own shares
• SECP amended the Listed Companies (Buy-Back of Shares) Regulations, 2019
• Non-application of this section.
• Board’s recommendation.
• Communication to the Commission.
• Procedure of purchase of shares.
• Register of shares
• Offence
CHAPTER-15 : REDUCTION OF SHARE CAPITAL,
• Reduction of share capital.
• Conditions for reduction of capital
• Reduction of share capital after court order
• Procedure for reduction of share capital
• Objection by creditors and settlements of objecting creditors.
• Diminution of assets.
• Power to dispense with consent of creditor on security being given for his debt.
• Order confirming reduction.
• Confirmation order of the Court.
• Registration of order of reduction.
• Liability of members in respect of reduced shares.
• Penalty on concealment of name of creditor
• Publication of reasons for reduction.
• Increase and reduction of share capital in case of a company limited by guarantee having a share capital.
UNLIMITED LIABILITY OF DIRECTORS
• Limited company may have directors with unlimited liability.
• Special resolution of limited company making liability of directors unlimited.
CHAPTER-16 : REGISTRATION OF MORTGAGE, CHARGES, ETC.
• Requirement to register mortgage/charge.
• Powers to mortgage or charge
• Particulars in case of series of debentures entitling holders pari-passu.
• Register of charges to be kept by registrar
• Index to register of mortgages/charges
• Endorsement of certificate of registration on Debenture or certificate of debenture stock.
• Duty of company and right of interested party as regards registration.
• Modification in the particulars of mortgage or charge
• Copy of instrument creating mortgage or charge to be kept at registered office.
• Rectification of register of mortgages
• Company to report satisfaction of charge
• Power of register to make entries of satisfaction and release in absence of intimation form Company
• Punishment for contravention
CHAPTER-17 : MANAGEMENT AND ADMINISTRATION
• Members of a company.
REGISTER AND INDEX OF MEMBERS.
• Register of members.
• Index of members.
• Trust not to be entered on register.
• Register of debenture-holders.
• Index of debenture-holders.
• Record of unlimited beneficial owner
• Right to inspect and require copies.
• Power to close register.
• Power of Court to rectify register.
• Punishment for fraudulent entries and omission from register
• Notice to registrar of rectification of register.
• Register to be evidence.
• Annual return.
CHAPTER-18 : MEETINGS AND PROCEEDINGS
Statutory, annual general and extraordinary meetings, notices, proceedings, resolutions, voting, polls etc.
• Statutory meeting of a company
• The term ‘meeting’ explained.
• Division of powers between the shareholders and the directors of the company.
• Procedure to hold statutory meeting
• The directors shall deliver statutory report
• Contents of the statutory report
• Auditor’s report
• Annual general meeting
• Timing, place etc. for holding AGM
• SECP issued Practice Guide for Conducting Board and General Meetings
• Businesses to be transacted at AGM
• Notice of AGM
• Notes in the notice of AGM.
• Consent for video conference facility
• Statement of material facts u/s 134 of the Act
• SECP directives to corporate sector.
• Listed companies are allowed to hold through electronic mode.
• Application for extension for holding AGM
• Use of video conference facility for board’s meetings
• Extra Ordinary General Meetings (EOGM).
• Objects of holding EOGM.
• Notice for holding EOGM.
• Notes in the notice of EOGM.
• Provisions as to meetings and votes.
• Facility of video-link.
• Statement of special business.
• Chairman of the meeting.
• Voting rights.
• Quorum of general meeting.
• Power of the Court to declare proceeding of General meeting invalid.
• Proxies
• Appointment of a proxy
• Guidelines for CDC account holders.
• Representation of body corporate or corporation at meetings
• Representation of Federal Government at meetings of companies.
• Notice of resolution.
• Special resolution.
• Circumstances for passing special resolution
• Authorized officer to execute special business
• Ordinary resolution.
• Voting by show of hands-first instance.
• Voting and poll
• Declaration by chairman-show of hands
• Demand for poll.
• Poll through secret ballot.
• Companies (Postal Ballot) Regulations 2018
• SECP for grant e-voting facility to members of the listed companies
• Mandatory electronic voting option to listed company’s members
• Time of taking poll.
• Resolution passed-adjourned meeting.
• Power of Commission to call meetings.
• Punishment for default in complying with provisions of section 147.
• Passing of resolution by the members through circulation
• Filing of resolution.
• Records of resolutions and meetings.
• Inspection of records of resolutions and meetings
CHAPTER-19 : APPOINTMENT AND REMOVAL OF DIRECTORS
Director’s, key managerial personnel, directors election, Independent/female director, their appointment/removal.
• Ineligibility of certain persons to become director.
• Powers for the management of a company.
• Appointment of directors
• Procedure for appointment of directors.
• Minimum number of directors of company
• The directors are trustees.
• Restrictions on number of companies for directorships.
• Number of directorship.
• Representation of minority shareholders.
• Director training program
• Orientation of all directors, local and foreign...
• Corporate compliance with the Code of Corporate Governance
• BOD is responsible for adopting governance practices
• First directors and their term.
• Appointment of directors by the members in general meeting
• Retirement of first and subsequent directors.
• Penalty for non-holding AGM or EOGM for election.
• Procedure for election of directors.
• The company secretary functions for director’s election
• Director to have been declared elected.
• Election of directors of a company limited by guarantee.
• Procedure of election, documents etc.
• Documents to be submitted by the contesting candidate for election of director
• Documents to be submitted by the contesting as Independent director
• Appointment of additional director.
• Appointment of director to fill casual vacancy
• Alternate director.
• Fresh election of director of a listed company
• Power of the Court to declare election of directors invalid
• Term of office of directors.
• Term of office of director under Trade Organization Act 2013
• Fresh election of directors in case of unlisted companies
• Removal of directors
• Procedure for removal of directors.
• Appointment of Nominee director.
• Certain provisions not to apply to directors representing special interests
Independent Director:
• Manner of selection of independent directors and maintenance of databank of independent director
• Ineligibility independent director.
• Selection of independent director
• Consent of independent director is mandatory
• The Board of election of independent director.
• Independent director should be free from conflict of interest.
• Conditions to be eligible as independent director.
• Election of an independent director of listed companies
• Criteria for electing of independent director.
• Data bank for chosen independent director.
• The SECP has notified institutes for data bank
• Companies (Manner and Selection of Independent Directors) Regulations, 2018
Female Director
• Female representation on the board of PIC
• SECP has directed the listed companies to implement gender diversity polices
• Consent to act as director to be filed with the company
• Validity of acts of directors.
• Relationship of a director and the company
• Penalties.
• Restriction on director’s remuneration.
• Directors are not entitled to remuneration
• Formal remuneration policy.
• Determination of remuneration
• Vacation of office by the directors.
CHAPTER-20 : DISQUALIFICATION OF DIRECTORS BY THE COMMISSION
• Disqualification orders.
• Personal liability for company’s debts where person acts while disqualified.
• Prohibition on assignment of office by directors
• Penalty for unqualified person acting as director.
• Ineligibility of bankrupt to act as director.
• Liabilities of directors and officers.
• Protection to independent and non-executive director
• Liability of Independent/non-executive directors
• Rules for appointment of an executive director
• The term ‘non-executive director’ defined.
• Distinction between executive and non-executive director
• Loans to director’s requirement of member’s approval
• Directors shall disclose their interest.
• Responsibilities of directors towards Commission and registrar.
• Prohibition regarding making of political contribution
• Prohibition regarding distribution of gifts.
CHAPTER-21 : CHIEF EXECUTIVE
Appointment of chief executive, chairman, company Secretary, chief financial officer, head of internal audit and their removal
• Appointment of first chief executive.
• Public Sector Companies (Appointment of Chief Executive) Regulations, 2019.
• Appointment of subsequent chief executive (CE)
• Board appoints any person to be the CE
• Terms of appointment of chief executive
• Board determines the terms and conditions for appointment of CE.
• Restriction on appointment of chief executive
• Removal of chief executive.
• Removal of Chief Executive in PSCs
• Chief executive not to engage in business competing with company’s business.
• CEO to hold the properties and assets as a trust
• Listed Companies (Code of Governance) Regulations, 2018
• CEO bring significant issues to BOD notice
• Role and responsibilities of a chairman
• Chairman in a listed company.
• BOD appoints chairman
• Penalty.
• Public company to have a secretary.
• Approval of appointment of secretary.
• Qualification of company secretary.
• Role and responsibilities of secretary.
• Functions/responsibilities of secretary.
• Removal of a secretary.
• Appointment of CFO.
• Role of CFO.
• Qualification of CFO.
• Duties and responsibilities of CFO.
• The CEO and CFO shall endorse financial Statement of the company.
• Challenges to be faced by the CFO.
• Removal of a CFO.
• Qualification of internal auditor.
• Composition and functions of internal audit.
• Internal audit team
• Company’s management to establish internal control.
• Management to establish internal audit.
• Performance appraisal of Head of Internal Audit
• Removal of internal auditor.
• Listed company to have share registrar.
• Share Registrar and Balloters Regulations, 2017
• Bar on appointment of sole purchase, sale agents.
• The Companies (Appointment of Legal Advisors) Act, 1975.
CHAPTER-22 : BOARD OF DIRECTORS, THEIR MEETINGS, FUNCTIONS AND RESPONSIBILITIES.
• The Listed Companies (Code of Governance) Regulations 2019
• Board of Directors’ role.
• Minimum number and composition of Board.
• Board of Directors’ meeting and related matters.
• Proceedings of the board meetings u/s 176 .
• Records of resolutions and board meetings u/s 179.
• Passing of resolution by the directors through Circulation u/s 179
• BOD is responsible for adopting governance practices.
• Chief features of CCG 2019
• Powers of board u/s 183.
• Listed companies have no powers to dispose of an undertaking
• The term ‘undertaking’ explained
• Key responsibilities of the Board
• Functions and responsibilities of BOD.
• The BOD shall determine risk management policy
• The board shall monitor the company’s responsibilities and accountabilities.
• Significant policies
• Annual evaluation of the board’s own performance
• The SECP has issued guidelines for Performance
• Evaluation of the BOD, CEO and Chief Regulatory Officer
• Issues to be placed for decision of BOD.
• The matters to be decided by the Board
• CCG 2018 has highlighted the responsibilities of BOD
• Related party transactions.
• Procedure of approval of capital expenditures.
• BOD to face consequences for non-presentation of
• Annual Accounts in the AGM.
CHAPTER-23 : BOARD OF DIRECTORS CONSTITUTES THE COMMITTEES.
• Responsibility of the Board to ensure vision controls.
• Committees to be constituted by the BOD.
• Audit Committee and related matters.
• Human Resources and Remuneration Committee.
• Nomination Committee.
• Risk Management Committee.
CHAPTER -24 : REGISTER OF DIRECTORS AND OTHER OFFICERS
• Register of directors.
• Particulars of directors and officers.
• Register of contracts etc. u/s 209
• Right to inspect.
CHAPTER-25 : MISCELLANEOUS PROVISIONS REGARDING INVESTMENTS, CONTRACTS OFFICERS AND SHAREHOLDINGS, TRADING AND INTERESTS
Inter-corporate loans, investments etc. register of directors and other officers, their interest, related transactions etc.
• Investments in associated companies and undertakings.
• The terms ‘Associated Companies’ and ‘Associated Undertakings’ defined,
• Conditions to make investment.
• The term ‘investment’ defined
• The company is prohibited to loan etc.
• Limit of return on investment.
• Powers of Commission.
• Investment through Special Resolution.
• Banks/Defies can invest in associated companies.
• Companies (Investment in Associated Companies or Associated Undertakings Regulations, 2017
• Disclosure of investment details is mandatory.
• Investments of company be held in its own name
• Company may hold shares in subsidiary company in the name of nominee.
• Method of contracting.
• Execution of bills of exchange, promissory notes and deeds
• Company has official seal for use abroad
• Duties of directors.
• Disclosure of interest by directors.
• Interest of officers.
• Interested director not to participate or vote in proceedings of board.
• Related party transactions.
• Related party transaction requires Board approval.
• The term ‘related transaction’ defined.
• Companies (Related Party Transactions and Maintenance of Related Records) Regulations, 2018.
• Register of contracts or arrangements in which directors are interested.
• Contract of employment with directors.
• Restriction on non-cash transactions involving director
• Declaring a director to be lacking fiduciary behavior.
• Director’s fiduciary position,
• Disclosure to members of directors’ interest in contract appointing chief executive or secretary.
• Contracts by agents of company in which company is undisclosed principal.
• Company deemed to be a public interest company in certain circumstances.
• Term ‘public interest company’ defined.
• Securities and deposits.
• Employees’ provident funds, contributory retirement funds and securities.
• Employees Contributory Funds (Investment Listed Securities) Regulations, 2018
• Notified Entities Regulations, 2018.
• Public Offering (Regulated Securities Activities Licensing) Regulations, 2017.
• Voluntary Pension System Rules, 2005.
• Penalty for contravention of sections 217-218.
CHAPTER-26 : ACCOUNTS OF COMPANIES
Books of accounts, financial statements, director’s report, disclosure requirements, approval and authentication etc.
• Books of account, to be kept by company.
• The expressions defined.
• Company is responsible to maintain of books of accounts
• Branch office of the company.
• Books are open to inspection.
• Limitation period to keep records.
• The BOD, the CEO and CFO are responsible for maintenance of accounts.
• Independent Auditor’s Report on compliance with maintenance of books of account.
• CEO/CFOs are required to endorse financial statements
• Reporting and disclosure requirements.
• Inspection of books of account by the Commission.
• Duties of the directors and the officers
• Actions by the inspection officer
• Default in compliance with provisions of section 221.
• Financial Statements.
• Directors’ responsibility
• Responsibilities of management of financial statements:
• Listed Companies;
• Banking Companies
• Contents of financial statements?
• The IFRS and other disclosure requirements.
• Approved accounting standards.
• Critical accounting estimates and adjustments
• IFRs/IASs in case of banking companies
• Statement of compliance by the banks
• Companies to follow IFRS 14
• Audit of the financial statement.
• Submission-audited financial statements.
• Circulation of annual audited accounts-electronically.
• Disclosure of significant policies on website
• Classification of Companies.
• Classification of companies under Third Schedule
• Contents of Financial Statements.
• This section does not apply to insurance and Banking companies.
• Commissioner’s powers to modify Schedule.
• Penalty.
• Corporate reporting in Pakistan.
• Preparation of financial statements ?.
• Duty to prepare directors’ report and Statement of Compliance.
• Director’s report is mandatory.
• Contents of an annual report.
• Disclosures about Board’s Committees.
• Contents of directors’ report and statement of compliance
• Additional matters to be reported by public or a private Subsidiary Company thereof
• Annexure A
• Statement of compliance?
• Contravention punishable
• Compliance statement-auditors’ review.?
• Consolidated financial statements.
• Interim financial statement.
• Auditors’ report.
• Disclosure of qualification.
• Signature of financial statement.
• Financial year of holding company and subsidiary.
• Definitions of the expressions of section.
• Rights of holding company’s representatives and members
• Financial Statements of modaraba company to include modaraba accounts.
• The Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980
• Approval and authentication of Financial Statements
• Financial statement to be endorsed by the CEO/CFO
• Initialing of financial statement by external auditor.
• SECP’s clarification.
• Compliance by listed companies.
• Copy of Financial Statements to be forwarded to the registrar
• Right of member of a company to copies of the Financial Statements and the auditors’ report.
• Penalty for improper issue, circulation or publication of Financial Statements.
• Quarterly financial statements of listed companies
• Reporting and disclosure requirements.
• Financial reporting and corporate compliance responsibility
• Electronically transmission of financial reports.
• Circulation of accounts through e-mail etc.
• Companies (Compliance and Reporting) Regulations, 2017
• Maintain functional website.
• Power of Commission to require submission of additional statements of accounts and reports
• Rights of debenture holders to obtain copies of financial statements.
• PSX -introduces ‘Compliance Calendar’.
• Application of ICAP’s Code of Ethics 2019
CHAPTER-27 : DIVIDENDS AND MANNER AND TIME OF PAYMENT THEREOF
e-payment of dividends, unclaimed dividends and shares, modaraba certificates, withholding tax and dividends etc.
• Certain restrictions of declaration of dividend
• Procedure of declaration of dividend.
• Dividend to be paid only out of profits.
• Dividend not to be paid except to registered shareholders
• Payment of dividend through bank account
• Companies (Distribution of Dividends) Regulations, 2017
• Listed company’s shareholders to provide their bank account detail to the company
• SECP reduced in turnaround time for payment of dividend
• Claim of exemption from WHT from dividend
• WHT on dividend paid to non-taxpayers
• WHT of advance tax in unconstitutional
• Payment of cash dividend electronically.
• Share registrar to dispatch dividends.
• Centralized Cash Dividend Register.
• Directors not withhold declared dividend.
• Dividend deemed to have been declared.
• CEO’s responsible for payment of dividend
• The convicted CEO is bar from holding position
• Commission may allow withhold dividend.
• A company may withhold dividend.
• Unclaimed shares, Moradabad certificates and dividend to vest with the Federal Government
• Unclaimed dividend to be deposit into F.G. A/C
• Mechanism for payment of unpaid/claimed dividend
• Companies to preserve the records of unclaimed dividends
• Updated list of unclaimed dividend on company’s web
• Application to the Commission for payment of unclaimed dividend or instruments etc.
• Other Instruments and Undistributed Assets Regulations 2017
• Return of unclaimed dividend to the Commission
CHAPTER-28 : AUDIT
Their appointment, qualification, removal, remuneration, rotation, Independent audit report etc.
• Appointment, removal and fee of auditors.
• Appointment of first-subsequent auditor.
• Representation by the retiring auditors.
• Removal of auditors-procedure of
• Casual vacancy to be filled.
• Consequences for not appointing auditor
• Remuneration of an auditor.
• Consent of the auditors.
• Director’s recommendation for appointment of an auditor
• Terms of appointment of external auditor.
• Mandatory conditions for appointment of an auditor by a company.
• Mandatory terms for appointment of external auditors
• Prohibitions for external auditors.
• External auditor shall not perform management services
• External auditor’s term of appointment
• Qualification/disqualification of auditors
• Persons qualified for appointment as auditor
• Rotation of auditors.
• Confirmation for satisfactory rating by the auditor.
• Auditors safeguards shareholders’ interest
• Audit Committee, composition, functions.
• Internal audit team.
• Ineligible persons for appointment auditor
• Exception of persons who is indebted to the company
• Vacation of office as auditor.
• An auditor is liable to penalty.
• Appointment as auditor is void.
RIGHTS AND DUTIES OF AUDITOR
• Auditors’ right to information.
• Duties of auditor.
• Duties of an auditor to report facts.
• Auditor of a company to from an opinion.
• Independent Auditors’ Report
• Independent Auditor’s Report of banking companies
• Auditors’ responsibilities for the financial statements.
• Audit of cost accounts.
• Signature of auditor’s report.
• Penalty for non-compliance with the provisions by companies
• Penalty for non-compliance with provisions by auditors.
CHAPTER-29 : POWER OF REGISTRAR TO CALL FOR INFORMATION
• Power of registrar to call information.
• Seizer of documents by registrar, inspector or investigation officer.
• SECP (Search and Seizer) Rules, 2019.
INVESTIGATION AND RELATED MATTERS
• Investigation, fraud, inspector’s reports compensation etc.
• Investigation into affairs of company.
• Investigation of company’s affairs in other cases
• Serious Fraud Investigation.
• Inspector to be a Court for certain purposes
• Power of inspectors to carry investigation into affairs of associated companies.
• Duty of officers to assist the inspector.
• Inspector’s report.
• Prosecution.
• Power of Commission to initiate action against management
• Effect of Court’s order.
• No compensation to be payable for annulment or modification of contract.
• No right to compensation for loss of office
POWER OF COURT HEARING APPLICATION
• Application for winding up of company or and order under section 286
• Imposition of restriction on shares and debentures and prohibition of transfer of shares or debenture in certain cases
CHAPTER-30 : MEDIATION, ARBITRATION, ARRANGEMENTS AND RECONSTRUCTION
• Resolution of disputes through mediation
• Power for companies to refer matter to arbitration
• Compromise with creditors and members
• Power of Commission to enforce compromises and arrangements.
• Information as to compromises or arrangements with creditors and members
• Power of Commission to facilitate reconstruction or amalgamation of companies.
• Amalgamation
• Notice to be given to registrar for application u/s 279 to 282
• Amalgamation of wholly owned subsidiaries in holding company
• Amalgamation of subsidiaries.
• Filing of copy of scheme of amalgamation.
• Power to acquire shares of members dissenting from scheme or contract.
CHAPTER-31 : PREVENTION OF OPPRESSION AND MIS-MANAGEMENT
• Rehabilitation of sick public sector companies.
• Revival of stressed companies.
• Corporate Rehabilitation Regulations, 2019 (CRC).
• Corporate Restructuring Companies
SUPPLEMENTARY PROVISIONS AS TO WINDING UP
• Registrar may strike defunct company off registrar
• Easy exit of a defunct company.
CHAPTER-32 : COMPANIES ESTABLISHED OUTSIDE PAKISTAN PROVISION AS TO ESTABLISHMENT OF PLACES OF BUSINESS IN Pakistan
Foreign direct investment in offshore, service, agriculture sectors in Pakistan, communication with the registrar etc.
• Application of this Part to foreign companies.
• Foreign companies-defined.
• Foreign Companies Regulations, 2017
• Winding up of foreign company
• Documents to be delivered to registrar by foreign companies
• List of documents to be filed with the registrar
• Requirements after establishment of public place of business by foreign companies
• Information for the companies having foreign Investment or collaboration.
• Foreign investment is allowed on reportable basis
• Foreign direct investment in service sector.
• Agriculture Farming Sector.
• Foreign company is required to obtain approval of BOI
• Return to be delivered to registrar by foreign companies whose documents altered.
• Furnishing documents for incorporation.
• SECP amended Foreign Companies Regulations 2018
• Accounts of foreign companies.
• Books of accounts by foreign company.
• Foreign company shall file financial statements with the registrar
• Certain obligations of foreign companies.
• Additional requirements for foreign subscribers.
• Security clearance.
• Stock Exchange (Corporatization Demutualization and Integration) Regulation, 2012.
• Shareholding limit for foreigners in PSX
• Power of the Commission to require information from foreign companies.
• Furnishing information of beneficial ownership
• Foreign companies requires to file declaration
• Service on foreign company.
• Company’s failure to comply with this part not to affect its liability under contract.
• Provisions relating to name, inquires to apply to foreign companies.
• Intimation of ceasing to have placed of business to be given
• Striking name of the foreign company by the registrar.
• Penalties.
• Interpretation of provisions of this part.
PROSPECTUS
• Issue of prospectus
• Restriction on canvassing for sale of securities.
• Registration of charges.
• Notice of appointment of receiver.
• Notice of liquidation.
CHAPTER-33 : GENERAL
Shariah compliant companies/securities, Shariah accounts, Audit, Islamic economic system and businesses etc.
• Certification of Shariah compliant companies and Shariah compliant securities
• Principles of Islamic Economic
• Shariah compliant businesses
• Islamic economic system
• Shariah compliant securities
• Shariah Governance Regulations 2018
• SECP unveils of ‘7’ prohibited products
• Certification of Sharia compliance
• Internal Shariah Audit
• PSX conducts screening of listed companies
• Minimum Shariah screening criteria’s
• External audit of Shariah compliant companies
• Shariah standard of Accounting and Auditing
• Organization of Islamic Financial Institution (AAOFI)
• Sukuk (Privately Placed) Regulations 2017
CHAPTER-34 : COMPANIES’ GLOBAL REGISTER OF BENEFICIAL OWNERSHIP
Offshore investment of expats, money laundering, counter terrorism financing, FATA, free zones
• Companies Global Register of Beneficial Ownership
• Shareholding in foreign company
• Difference between beneficial and legal ownership
• Offshore investments, expats etc.
• Opportunities for foreign direct investment (FDI) in Pakistan
• Declaration of shareholding in foreign company.
• Maintenance of records and disclosure requirements of foreign investments.
• SECP directives to maintain UBO information.
CHAPTER-35 : OFFENCES RELATING TO FRAUD, MONEY LAUNDERING AND TERRORIST FINANCING, FATA’S REQUIREMENTS
• Prevention of offence relating to fraud, money laundering and terrorist financing
• FATA requires measures to prevent ML and TF
• Anti-Money Laundering and Counter Financing Terrorism Regulations 2018
• Funding and Donations in cash etc. to the entity or Individual listed under UNSC, prohibited
• Regulated persons to submit information to the Commission
• SECP’s guidelines to implement AML and CFT
• Reporting requirements
• Free Zone Company.
• Concept of free zone
• Filing of documents through Intermediaries
• Intermediary (Registration) Regulations, 2017.
• Acceptance of advance by real estate Cos engaged in real estate projects. (Omitted)
• Agriculture Promotion Companies
• Classification of farm companies
• SECP Collateral Management Companies Regulations 2019
• Economic growth through agriculture
• Security clearance of shareholder and director
CHAPTER-36 : REGISTRATION OFFICES AND FEES, FILING DOCUMENTS, ELECTRONIC NOTICES, TRANSFER OF SHARES, DESTRUCTION OF RECORDS & FEES ETC.
• Registration offices.
• Production of documents by registrar.
• Registrar not accept defective documents
• Special returns to rectify the data.
• Jurisdiction in the dispute relating to shareholding and directorship.
• Approval of transfer of shares by the agents licensed by the Commission.
• Acceptance of documents presented after prescribed time
• Fees.
• Power to specify fees chargeable by companies.
• Filing of documents electronically.
• Destruction of physical record.
• Supply of documents, information, notices, to the members electronically.
• Enforcing compliance with provisions of Act.
• Power of Court trying offences under Act to direct compliance with the provisions.
CHAPTER-37 : LEGAL PROCEEDINGS, OFFENCES, ETC.
• Offences to be cognizable.
• Complaint to the court by the Commission, Registrar
• Member/creditor in case of certain offences.
• Penalty to be imposed by the Commission.
• Adjudication of offences and standard scale of penalty
• A Review and revision.
• Appeal against order passed by officer of the Commission
• Appeal before the Appellate Bench.
• Powers of the Commission in relation to enquiries and proceedings.
• Procedure for trial of a corporate body
• Recovery penalty.
• Power to require limited company to give security for costs
• Penalty for false statement, falsification, forgery, fraud, deception.
• Penalty for false statement.
• Penalty for wrongful withholding of property
• Liability of directors for allotment of share for inadequate consideration.
• Penalty carrying on ultra vires business.
• Penalty for improper use if word ‘Limited’
• Penalty where no specific penalty is provided.
CHAPTER-38 : APPLICATION OF ACT TO COMPANIES GOVERNED BY SPECIAL ENACTMENTS.
Insurance companies, takaful, non-banking finance / micro-finance companies and modaraba companies
• Application of Act to companies governed by special enactments.
• Insurance Companies.
• Takaful
• General Takaful Accounting Regulations, 2018--19
• Non-Banking Finance Companies.
• Non-Bank Microfinance Companies
• Asset Management Companies.
• Modaraba Companies and Modarabas.
CHAPTER-39 : SCHEDULE, TABLES, FORMS AND GENERAL RULES, FILING PROCEDURES, MODE AND PAYMENT OF FEE SCHEDULE, TABLES, FORMS AND GENERAL RULES.
• Forms
• Filing procedure
• Payment of fee etc. procedure.
• Mode of payment of fee.
• Service of documents on Commission etc.
• Repeal and savings.
• Power to make regulations.
• Validation of laws.
• Former registration offices and Register continued.
• Removal of difficulty.
SCHEDULES:
BEST CORPORATE REPORT AWARDS 2023 EVALUATION CRITERIA
(Criteria developed by Evaluation Committee of ICAP-ICMAP)
