This power point file contains the details of Securities & Exchange Commission of Pakistan (SECP), Its brief history, functions and objectives, organizational structure, process of registering a private company and divisions. It also shows the types of companies at the end. With Reference as: - https://www.secp.gov.pk/

2. Group Members
• IRFAN UR REHMAN
• FAHAD MASOOD
• WASIF EHSAN
•
• TAUQEER AHMAD
• SAAD IBRAHIM

3. Securities and Exchange
Commission of Pakistan
SECP

4. History
The Securities and Exchange Commission of
Pakistan (SECP) is the successor to the former
Corporate Law Authority (CLA), which was an
attached department of the Ministry of Finance.
The process of the CLA's restructuring was
started in 1997 under the Capital Market
Development Plan of the Asian Development
Bank (ADB).
The parliament passed the Securities and
Exchange Commission of Pakistan Act, which
was broadcasted in December 1997 and become
operational in January, 1999.

5. Introduction
• SECP i.e. The Securities and exchange commission of Pakistan is a financial
regulatory institution whose main objective is in a struggle to develop a modern
and efficient corporate sector
• It encourages investment and foster economic growth and prosperity in Pakistan.
• It also ensures proper risk management procedures in the capital market and
protects investors through open policy measures and effective enforcement
practices.
• The SECP has also been assigned with oversight of various external service
providers to the corporate and financial sectors, including chartered accountants,
credit rating agencies, corporate secretaries, brokers, surveyors etc.

6. Main
objectives/directive
The current directive of SECP includes following things: -
Regulation of corporate sector and capital market
Supervision and regulation of insurance companies
Supervision and regulation non-banking finance companies
and private pensions schemes
Oversight of various external service providers to the
corporate and financial sectors, including chartered
accountants, credit rating agencies, corporate secretaries,
brokers, surveyors etc.

7. Functions of SECP
SECP’s main functions includes following: -
regulation of securities market and related institutions like Central Depository Company (CDC)
Credit Rating Companies and Modarabas (funds operating based on Islamic economic principles).
Administration of the company law.
Regulation of non-banking finance companies like leasing companies
Investment banks and mutual funds

8. Continued…
• Regulation of insurance business and private pensions.
• Guiding the business in stock exchange and any other securities market.
• Encouraging the organized development of the capital market and the
corporate sector in Pakistan.
• Prohibits the fraud and unfair trade practices relating to securities market.

9. Incorporation
of Company
Incorporation of companies has been made much easier,
smooth and swift ensuring completion of this process
within three days.
This task has been entrusted to the Registration Department,
Company Law Division which has its field offices known as
Company Registration Offices (CROs) for the purpose of
incorporation or registration of different type of companies.
One of the important functions of the SECP is the
incorporation/registration of companies.

10. Continued…
• E-Services has been launched by the SECP in Sep. 2008, which facilitates
online availability of name, online incorporation of companies and e-filing
of statutory returns
• It enables the promoters and management of the company to interact
online using the e-Services portal, without visiting the SECP offices.
• Online services save time and resources, increase efficiency, create a
paperless environment, promote confidence and strengthen the country’s
economy.

11. Organizational
Structure of
SECP
Policy Board: -
• The Policy Board is based on maximum 11
members that are all appointed by the Federal
Government. (i.e. Five Ex-Officio Members
and Six members from Private sector).
• The main objective of the Policy Board is to
provide guidance to the Commission in all
matters relating to its functions and to
formulate policies in consultation with the
Commission.
• The Policy Board is also responsible for
advising the Government on matters falling
within the purview of the Act and other
corporate laws.

12. Organizational Structure

13. Organizational Structure – Commission
• In the organizational chart above, the first thing that comes is commission
under the Securities and Exchange Policy Board.
• Commission of SECP is consist of Commissioners, including chairman.
Commission is based on 5-7 members.
• The commissioner is appointed by the Federal Government.

14. Commissioner Expertise
Commissioner has expertise in following concerns: -
• Securities market
• Law
• Accountancy
• Economics
• Finance [insurance]
• Industry

15. Continued…
• In organizational chart, Under the commission, there are Commission
Secretariat, Internal Audit & Compliance Department, Appellate Bench
Registry and Shari’ah Advisory Board.
• Internal Audit & Compliance: This department conduct independent and
objective audits, evaluations, investigations and other reviews of SECP
programs and operations.
• Shariah Advisory Board: Shari’ah Advisory Board (SAB) of SECP give its
opinion on Islamic capital market matters.

16. Organizational Structure – Chairman
The Federal
Government shall
appoint one of the
Commissioners to be
the Chairman of the
Commission. (2-3
Years).
Its duty is to advice
and help on various
day-to-day activities
and issues.
They can provide input
assistance in
processing the new
laws and amendments
in existing laws and
rules/regulations.

17. Chairman Secretariat Departments
• The chairman Secretariat is further divided into Five different
departments that are as follows: -
1. Local and Bilateral Relations Department: Its handles
communication received from federal and provincial
government; also deals the correspondence in ministries,
donor agencies etc.
2. Media Corporate Communication Department: It interacts
with media corporations to provides timely information on
events happening and changes that are occurred by the law
regulations.

18. Continued…
3. Islamic Finance Department: Its main duty is to
enforce the Islamic laws on the registered Companies
and creates regulatory framework for Shari’ah-
compliance companies to ensure that they undertake
their business activities in accordance with Shari’ah.
4. Professional Development Department: Its main
duty is to conduct the seminars and arranges the
training for the SECP offices and other capital market
Intermediaries
5. Systematic Risk Department: This department
considers the importance of management of systematic
risk for the Commissioner. It is responsible for
minimizing any possible systematic risks and
interruptions during the smooth running of operations.

19. SECP divisions
One of the main commissioners is the SECP divisions. They
are divide into following divisions: -
Company Law Division
Securities Market Division
Specialized Companies Division
Insurance Division
Prosecution and Legal Affairs Division
Support Services Division

20. Registering a Private Company
• Private Company: Any company which is registered as a private
company and its article of association restricts the certain things is called
as a Private Company. These restricted things are as follows: -
1): Number of shareholders will not exceed from 50 i.e. the joint
shareholders
2): It restrict the transfer of shares freely.
3): Private company cannot incite general public for its subscription.

21. Process of registering the Pvt Company
The process of incorporating a company in Pakistan includes five basic
steps. Each of these steps are explained below with their specific
requirements.
Step – 1: Company Name Reservation:
• For this purpose, an application from is filled by paying its fee.
• This application form allows the individual to mention three names for
their company from which a one name is selected.
• If the name reservation becomes successful, individual receives a mail
about it and the particular name is reserved for 90 days.

22. Continued…
Prohibited Names:
While selecting the
name it should be
considered that the
name:
is not inappropriate,
undesirable or
deceptive.
does not exploit or
offend the religious
sentiments of the
people.
is not a name
identical with the
name of the
company already
registered.
not closely resemble
with the name of
the company
already registered.

23. Step – 2: Preparation of Documents
The main documents prepared during the process of incorporation are:
Memorandum of Association (MOA) and Article of Association (AOA).
Memorandum of Association:
• This document is stated as an external constitution of the company
containing seven clauses.
• Mainly for the investors and public.
• It further states the amount of share capital with which the company
proposes to be registered and the persons who are the initial members of
the company, the signatories to the MOA.

24. Continued…
Clauses of MOA
Following clauses exist in the memorandum of association of the company: -
Name clause
Registered office clause
Principal line of business clause
Undertaking clause
Liability clause
Authorised capital clause
Subscription clause

25. Continued…
Articles of Association
• This document shows the rules on which the company runs.
• It is an internal constitution of the company containing rules regarding the
management of affairs of the company.
• The articles of an unlimited company or a company limited by guarantee
(if both have a share capital) shall state the amount of share capital with
which the company proposes to be registered.

26. Step – 3:
Challan Fee
The challan fee is attached to share
capital and can calculate it online
using the Incorporation Fee Calculator.
Offline Payment: Individual uploads
the deposit receipt before you
can submit the process.
Online Payment: Individual submits
the process and then it will appear in
the online payment section of
eservices from where he/she can make
the online payment.

27. Step – 4:
Verification of
documents
After preparation
of all required
documents, the
individual submits
them before the
registrar of the
company.
After submitting
the documents, the
registrar verifies
the documents that
either is there any
deficiency or not.
If there is no
deficiency, then
registrar issues the
certificate and
record the
documents in
register.

28. Step – 5: Certificate of Incorporation
• SECP will take about seven working days to complete the process if there
is no objection then individual receives a confirmation email
regarding successful incorporation of your company including the
incorporation number.
• The certificate is issued by the registrar.
• Individual can pick up the Incorporation Certificate from the
concerned Company Registration Office (CRO) by showing a copy of the
payment receipt or it will be delivered to your registered address

29. Continued…
• Characteristics of incorporation certificate:
Following are some characteristics of Incorporation Certificate: -
1): It contains the name of company.
2): Mentions that either the company is private limited or public limited.
3): Also shows the serial number of companies.

30. Types of Companies
There are four ways in which the types of companies are explained
i.e.
1) According to its Formation
• These types of companies can also be called as companies’
classification based by virtue of legal form.
• There are following categories that lie in the types of companies
with respect to its formation

31. According to its Formation
• Chartered Company: Chartered company is formed under a
special charter granted by the head of the state, or Queen or
King in some countries e.g. East India Company.
• Statutory Company: A company which is created by an act
of parliament is called as statutory company e.g. State Bank of
Pakistan.
• Registered Company: Any organization registered under the
companies’ act 2017 or any previous law is called as registered
company.

32. Registered Company
Under the registered companies, there are following two main categories: -
• Private Company: There are two forms of private companies.
a. Single Member Company (SMC): It is a company which consists of a
single member who is also the director of the company.
b. Other private Companies: A company which is registered as a private
company and its article of association restricts the following things i.e.
transfer of shares freely, number of members not exceeding from 50,
invitation of subscriptions from general public for its shares

33. Continued…
• Public Company: a company which is not a private company it can take
two forms:-
i. Public Listed Company: Such form of public company whose securities
are listed on an exchange and they are traded as per regulations of that
stock exchange.
ii. A company which is not registered on stock exchange as compared to
the other companies is called as Public Unlisted company.
• Public unlisted companies have not made an offer of their shares to
general public hence their shares are not traded on a stock exchange.

34. According to its Liability
i. Company limited by its shares: A company limited by shares is the
type of company in which the liability of the members of the company is
limited to the amount unpaid on the shares if any.
• 99% of the companies are registered as limited by share that are profit-
oriented.
ii. Company limited by guarantee: A company limited by guarantee
is the type of company in which the liability of the members of the
company is limited up to the amount undertaken by members to
contribute in the event of winding up of the company.

35. Continued…
iii. Unlimited Company: is the type of company in
which the liability of the members of the company is
unlimited.
• . It shelters shareholders from liability in most
circumstances, with one major exception: upon
liquidation of the company
• If that happens, shareholders become liable for the debts
of the company.

36. According to its Control
The third type of company is related to according to its control. It includes
two of that companies i.e. Holding Company and Subsidiary Company.
i. Holding Company: It means a company or body corporate which holds
more than fifty percent (50%) in the voting securities of any other
company or controls the composition of the board of such other
company.
• A holding company doesn’t conduct any operations, ventures, or other
active tasks for itself. Instead, it exists for the purpose of owning assets

37. Continued…
ii. Subsidiary Company: It means a company or body corporate
whose more than fifty percent (50%) voting securities are held
or controlled (directly or indirectly), by some other company or
such other company controls the composition of the board of
such company.
• In the corporate world, a subsidiary is a company that belongs to
another company, which is usually referred to as the parent
company.
• The subsidiary structure can also offer tax advantages: They
may only be subject to taxes in their state or country, versus
having to pay for all the parent's profits

38. Association Not-for-Profit
• Companies Act-2017 allows the registration of company as
association, not for profit if they satisfy certain conditions to
SECP.
• the Commission may register it by a license for a period to be
specified, permit for the association to be registered as a limited
company without the addition of word “Limited”, or “(Guarantee)
Limited”, to its name.

39. Continued…
There are some following conditions that are referred to as Not-for-profit
association:
• Such association may be set up for any of the following purposes: Commerce, art,
science, religion, health, education, research, sports, protection of environment,
social welfare, charity or any other useful object.
• Such Association shall apply its profits, if any, or other income in promoting its
objects.
• Such Association shall prohibit the payment of any dividend to its members.
• Its objects and activities are not and shall not, at any time, be against the laws,
public order, security, sovereignty and national interests of Pakistan.

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