Commentary on companies amendment-act-2021

COMMENTARY ON THE COMPANIES (AMENDMENT) ACT, 2021
1 | P a g e
NO. FJ2 (49)/2021-LEGIS) THE LEGISLATION WAS RECEIVED ON DECEMBER 1, 2021 AFTER BEEN APPROVED BY THE PARLIAMENT
HEREAFTER PROMULGATED ON DECEMBER 04, 2021 CALLED AS THE COMPANIES (AMENDMENT) ACT, 2021.
These amendments were earlier promulgated through Companies (Amendment) Ordinance, 2020 in May 2020 which were lapsed after three
months and now have been enacted through an Act of Parliament hereafter called as Companies (Amendment) Act, 2021 measure amendment
as made for ease of Doing Business in Pakistan and to encourage entrepreneur in their early stage of their business.
Amendment Impact Comments/opinions
in Section 2, [Definitions] sub-
Section 1 clause 49 sub section a
after the word share the expression
“, save as otherwise provided under
this Act” shall be inserted
(49) “private company” means a company which, by its articles-
(a) restricts the right to transfer its shares, save as otherwise
provided under this Act;
(b) limits the number of its members to fifty not including
persons who are in the employment of the company; and
(c) prohibits any invitation to the public to subscribe for the
shares, if any, or debentures or redeemable capital of the
company:
Provided that, where two or more persons hold one or more
shares in a company jointly, they shall, for the purposes of this
definition, be treated as a single member;
From this amendment; Further,
elaboration of the word “restricts” i.e all
restriction provided in the act will be
imposed.
after clause (67), tie following new
clause shall be inserted, namely: -
(67) “specified” means specified through regulations made
under this Act;
(67A) "startup company" means a company that-
From this amendment; new clause that
which were lapsed after three months of
promulgation through Companies
(Amendment) Ordinance, 2020 “the
track changes” have re-inserted.

2 | P a g e
(a) is in existence for not more than ten years from the date of
its incorporation or such other period or periods as may be
specified;
(b) has a turnover for any of the financial years since
incorporation that is not greater than five hundred million
rupees or such other amount or amounts as may be specified;
(c) is working towards the innovation, development or
improvement of products or processes or services or is a scalable
business model with a high potential of employment generation
or wealth creation or for such other purposes as may be
specified; or
(d) such other companies or classes of companies as may be
notified by the Commission:
Provided that a Company formed by the splitting up or
reconstruction of an existing Company shall not be considered
as a startup company:"
in section 6 [Procedure of the Court
and appeal], in sub-section (2), in
clause (e), after the word
"documents" the words "or any
category or classes of documents"
shall be inserted.
(e) any application for discovery of documents or any category
or classes of documents or interim injunction, if required;
From this amendment; the Word any
other classes of document have been
inserted to include classes of document
such as digital documents.
in section 17 [Effect of
memorandum and articles] for sub-
section (2), the following shall be
substituted, namely:-
(2) All moneys payable by a subscriber in pursuance of his
undertaking in the memorandum of association against the
shares subscribed shall be a debt due from him and be payable
in such time, manner and condition as may be notified by the
Commission.":
cash within thirty days from the date of incorporation of the
company:
From this amendment; The SECP will
issue notification regarding subscription
money.
We proposed the following:

3 | P a g e
“such time, manner and condition
as may be notified by the
Commission.":
Provided that in case the share money is not deposited within
the prescribed time, the shares shall be deemed to be cancelled
and the name of that subscriber shall be removed from the
register and the registrar shall give such direction to the
company in each case as deemed appropriate for compliance
with the provisions of the company law.
For companies which have local nationals
and natural person as
subscribers/promoters/prospective
shareholders the time should be the
same “thirty days”
The Companies which local nationals’
legal person/arrangement as
same “Sixty days”
For companies which have Foreign
Nationals and natural person as
same “Ninety days”
The Companies which Foreign Nationals
legal person/arrangement as
same “One twenty days”
sub-section (3) shall be omitted; (3) The receipt of subscription money from the subscribers shall
be reported by the company to the registrar on a specified form
within forty-five days from the date of incorporation of the
company, accompanied by a certificate by a practicing chartered
accountant or a cost and management accountant verifying
receipt of the money so subscribed.
From this amendment; as in the above
section the time frame has been omitted
from the Act and will be imposed through
notification the reporting time has also
been omitted
in sub-section (4), after the word
"section" the words "direction given
by the registrar" shall be inserted.
(4) Any violation of this section direction given by the registrar
shall be an offence liable to a penalty of level 1 on the standard
scale.
From this amendment; this insertion was
not necessary and the words that has

4 | P a g e
been inserted have some explanatory
error.
Same should be re-amended as under:
Any violation of the direction given by
the registrar under this section shall be
an offence liable to a penalty of level 1 on
the standard scale.
in section 18 [Effect of
registration], in clause (b), for the
expression "company, having
perpetual succession and a
common seal" the words "company
and having perpetual succession"
shall be substituted.
(b) the body corporate is capable of exercising all the functions
of an incorporated company and having perpetual succession
and a common seal;
From this amendment; as the
requirement of common seal has been
omitted in the section 23 the word
common seal has also been omitted.
Section 23 [Company to have
common seal] shall be omitted;
23. Company to have common seal.—(1) Every company shall
have a common seal. (2) A company’s common seal must be a
seal having the company’s name engraved on it in legible form.
(3) If any of the provision of this section is contravened or an
officer of a company or a person on behalf of a company uses or
authorises the use of another seal that purports to be the
company’s common seal, shall be liable to a penalty not
exceeding of level 1 on the standard scale.
From this amendment; the requirement
of common seal has been omitted.
Section 31, in clause (c)
[Memorandum to be printed,
signed and dated], for the
expression "and father's name or in
the case of married woman or
widow, her husband's or deceased
husband's name in full, his
(a) signed by each subscriber, who shall add his present
name in full, his occupation and father’s name or, in the
case of a married woman or widow, her husband’s or
deceased husband’s name in full, his nationality and his
usual residential address and such other particulars as
may be specified, in the presence of a witness who shall
From this amendment; some personal
details are omitted
However, it is further suggested that as in
case of online incorporation the
requirement of duly signed MOA has
been overlooked it should be mentioned

5 | P a g e
nationality and his" the expression
", nationality," shall be substituted.
attest the signature and shall likewise add his
particulars; and
that following persons have inserted the
pin and approved the MOA
Section 37 [Articles to be printed,
signed and dated], in clause (c), for
the expressions "and father's name
or, in the case of a married woman
or widow. her husband's or
deceased husband's name in full, his
nationality and his" the expression
", nationality." shall be substituted.
(c) signed by each subscriber, who shall add his present name in
full, his occupation and father’s name or, in the case of a married
woman or widow, her husband’s or deceased husband’s name in
full, his nationality and his usual residential address and such
other particulars as may be specified, in the presence of a
witness who shall attest the signature and shall likewise add his
particulars; and
From this amendment; some personal
details are omitted
However, it is further suggested that as in
case of online incorporation the
requirement of duly signed MOA has
been overlooked it should be mentioned
that following persons have inserted the
pin and approved the MOA
Section 62 [ Shares certificate to be
evidence], in sub-section (l), for the
expression " common seal of the
company or under official seal,
which must be facsimile of the
company’s common seal," the
expression " signature of authorized
officer of the company as may be
specified" shall be substituted.
62. Shares certificate to be evidence.—(1) A certificate, if issued
in physical form under signature of authorized officer of the
company as may be specifiedcommon seal of the company or
under official seal, which must be facsimile of the company’s
common seal, or issued in book-entry form, specifying the shares
held by any person or shares held in central depository system
shall be prima facie evidence of the title of the person to such
shares..
From this amendment; as common seal
has been omitted the signature of the
authorized person has been substituted.
However, after implementation of the
Section 72 which has been overdue the
words “A certificate, if issued in physical
form under signature of authorized
officer of the company as may be, or”
should be omitted. As from May, 31,
2017 4 year has been completed on May
31, 2021 and as per provision of the sub
section 2 two years will be completed on
May 31, 2023.
Section 83 [Further issue of capital]
in sub-section (1) for the words
"further share capital" the words
"further shares" shall be
substituted;
In clause (ii) sub clause (a) after the
words "shares held by' the words
83. Further issue of capital.—(1) Where the directors decide to
increase share capital of the company by issue of further share
capital, such shares shall be offered:
(a) to persons who, at the date of the offer, are members of
the company in proportion to the existing shares held by
such members through sending a letter of offer subject
to the following conditions, namely—
From this amendment; some
words/verbs are added and sentences
has been rephrased for proper
explanation
Percentage which a public Company
could hold of further issue for its
employees under “Employees Stock
Option Scheme” has been omitted.

6 | P a g e
"such members through" shall be
inserted; and
in sub-clause (iv), for the colon at
the end a semi colon shall be
substituted and thereafter the
proviso shall be omitted; and
for clause (b), the following shall be
substituted, namely:. "(b) in case of
public company and subject to
approval of the Commission, to any
person on the basis of a special
resolution either for cash or for
consideration other than cash:
Provided that the value of any non-
cash asset, not worth of
undertaking, service, benefit or
intellectual property shall be
determined by a valuer";
after clause (b), substituted as
aforesaid, the following new clause
shall be added, namely "(c) in case
of a private company and subject to
its articles and special resolution, to
any person, either for cash or for
consideration other than cash on
such conditions and requirements
as may be notified.";
(i) the shares so offered shall be strictly in proportion
to the shares already held in respective kinds and
classes;
(ii) the letter of offer shall state the number of shares
offered and limiting a time not being less than
fifteen days and not exceeding thirty days from the
date of the offer within which the offer, if not
accepted, shall be deemed to have been declined;
(iii) in the case of a listed company any member, not
interested to subscribe, may exercise the right to
renounce the shares offered to him in favour of any
other person, before the date of expiry stated in the
letter of offer; and
(iv) if the whole or any part of the shares offered under
this section is declined or is not subscribed, the
directors may allot such shares in such manner as
they may deem fit within a period of thirty days from
the close of the offer as provided under sub-clause
(ii) above or within such extended time not
exceeding thirty day with the approval of the
Commission;:
Provided that a public company may reserve a
certain percentage of further issue for its employees
under “Employees Stock Option Scheme” to be
approved by the Commission in accordance with the
procedure and on such conditions as may be
specified.
(b) in case of public company and subject to approval of
the Commission, to any person on the basis of a special
resolution either for cash or for consideration other than
cash:
Issuance of shares other than in cash for
a private limited Company.

7 | P a g e
Provided that the value of any non-cash asset, not worth
of undertaking, service, benefit or intellectual property
shall be determined by a valuer";
subject to approval of the Commission, to any person, in
the case of public company on the basis of a special
resolution either for cash or for a consideration other than
cash:
Provided that the value of non-cash asset, service,
intellectual property shall be determined by a valuer
registered by the Commission.
"(c) in case of a private company and subject to its
articles and special resolution, to any person, either for cash or
for consideration other than cash on such conditions and
requirements as may be notified.";
for sub-section (3), the following
shall be substituted, namely:-
"(3) The letter of offer, referred to in
sub-section (2). shall be
accompanied by a circular duly
signed by all directors or an officer
of the company authorised by them
in this behalf on such form as may
be specified containing material
information about the affairs of the
company, latest statement of the
(3) A copy of the letter of offer, referred to in sub-section (2)
shall, be accompanied by a circular duly signed by all directors or
an officer of the company authorised by them in this behalf on
such form as may be specified containing material information
about the affairs of the company, latest statement of the
accounts and the necessity for issue of further capital:
Provided thar a copy of such circular shall also be filed with the
registrar simultaneously at the time it is dispatched to the
shareholders." ;simultaneously with the dispatch to the
members, be sent to the registrar.
From this amendment; the requirement
of the intimation of offer letter has been
omitted and filing of circular with the
registrar has been inserted

8 | P a g e
accounts and the necessity for issue
of further capital:
Provided thar a copy of such circular
shall also be filed with the registrar
simultaneously at the time it is
dispatched to the shareholders." ;
for sub-section (4):
for the words "loan has", the
expressions "any loan or finances
have" shall be substituted;
after the words "loan or", the
expressions "finances or' shall be
inserted: and
for the words ' does", the
expression "or finances" shall be
substituted; and
(4) Notwithstanding anything contained in this section, where
any loan or financesloan has been obtained from any
Government by a public sector company, and if that Government
considers it necessary in the public interest so to do, it may, by
order, direct that such loan finances or or any part thereof shall
be converted into shares in that company, on such terms and
conditions as appear to the Government to be just and
reasonable in the circumstances of the case even if the terms of
such loan or financesdoes do not include the option for such
conversion.
From this amendment; in addition of loan
the word finance has been introduced to
cover any finance facility such as Islamic
finance facility or other financing facility.
in sub-section (5), after the words'
rate of interest" the words "or
profit' shall be inserted
(5) In determining the terms and conditions of conversion
under subsection (4), the Government shall have due regard to
the financial position of the public sector company, the terms
of the rate of interest or profit payable thereon and such other
matters as it may consider necessary.
From this amendment; the word profit
has been inserted to include Islamic
financing facilitates.
Section 83A [Employees' stock
options] insertion of new
"83A. Employees' stock options, -Notwithstanding anything
contained in section 83 or any other provision of this Act. a
company may, under the authority of special resolution, issue
shares in accordance with its articles under employees' stock
option in accordance with such procedure end subject to such
conditions as may be specified.
From this amendment; the employees
stock option for a public company which
was excluded from Section 83 (1) (a) (iv)
has been introduced as a complete
section namely Section 83A and here the
condition which restrict other companies

9 | P a g e
apart from the public company has been
precluded.
Section 86 [Prohibition of purchase
by company or giving of loans by it
for purchase of its shares],
subsection (1) shall be omitted.
(1) No company having a share capital, other than a listed
company shall have power to buy its own shares.
From this amendment; The option to buy
back of share has been introduced by for
all companies having share capital and
restriction on other companies other
than listed companies has been
removed.
Section 88 [Power of a company to
purchase its own shares]
in sub-section (1), the word "listed"
shall be omitted;
in sub-section (2), for the full stop at
the end, a colon shall be substituted
and thereafter the following
provisos shall be added, namely: -
"Provided that shares purchased by
an unlisted public company or a
private company shall be cancelled
and not be held as treasury shares:
Provided further that cancellation
of shares under this section shall
not be deemed to be a reduction of
share capital within the meaning of
section 89 and such shares shall be
cancelled in such form and manner
as may be specified."; and
(2) The shares purchased by the company may, in accordance
with the provisions of this section and the regulations, either be
cancelled or held as treasury shares;.
Provided that shares purchased by an unlisted public company
or a private company shall be cancelled and not be held as
treasury shares:
Provided further that cancellation of shares under this section
shall not be deemed to be a reduction of share capital within the
meaning of section 89 and such shares shall be cancelled in such
form and manner as may be specified."; and
From this amendment; The buy back
shares by Unlisted Public Company or a
Private Limited Company shall be
cancelled and could be placed in
unsubscribe shares.
Moreover, as per second provision
Section 89. [Reduction of share capital] is
inapplicable on Unlisted Public Company
or a Private Limited Company and shares
shall be cancelled in specified manner.

10 | P a g e
in sub-section (9), the words "either
through a tender offer or” shall be
omitted.
(9) The purchase of shares shall be made either through a tender
offer or through the securities exchange as may be specified.
From this amendment; buy back share
could only be purchase from SECP.
Section 137 [Proxies], in sub-
section (3), in clause (b), the words
"be under its seal or' shall be
omitted.
3) The instrument appointing a proxy shall—
(a) be in writing; and
(b) be signed by the appointer or his attorney duly authorised in
writing, or if the appointer is a body corporate, be under its seal
or
be signed by an officer or an attorney duly authorised by it.
From this amendment; As the definition
of Common Seal has been omitted here
the requirement of the seal on the proxy
has been removed.
Section 140 [Notice of resolution],
in sub-section (2), for the word
“ten", occurring first the word "five"
(2) The members having not less than ten five percent voting
power in the company may give notice of a resolution and such
resolution together with the supporting statement, if any, which
they propose to be considered at the meeting, shall be
forwarded so as to reach the company—
From this amendment; the eligibility to
have a notice of a general meeting has
been reduce to 5%, therefore, all
member who holds more than 5%
shareholding are liable to have the notice
of a general meeting.
Section 179 [Passing of resolution
by the directors through
circulation]
in sub-section (1), for the words
"signed by all" the words "approved
by majority of' shall be substituted;
and
in sub-section (4), for the word
'signified" the word "approved"
(1) A resolution in writing approved by majority of'signed by all
the directors or the committee of directors for the time being
entitled to receive notice of a meeting of the directors or
committee of directors shall be as valid and effectual as if it had
been passed at a meeting of the directors or the committee of
directors duly convened and held.
(4) A directors’ agreement to a written resolution, passed by
circulation, once approvedsignified, may not be revoked
From this amendment; the circular
resolution will be valid with the approval
of the majority of Directors; therefore,
the signature of all directors has been
removed.
Section 201 [Method of
contracting], in sub-section (1). in
clause (a), the words " and may affix
(a) an obligation which, if entered into by a natural person, will,
by law, be required to be by deed or otherwise in writing, may
be entered into on behalf of the company in writing signed under
the name of the company by a director, attorney or any other
From this amendment; as the definition
and requirement of the common seal has
been removed, therefore, here the word
common seal has also been removed.

11 | P a g e
common seal of the company" shall
be omitted.
person duly authorised by the board and may affix common seal
of the company;
Section 203. [Company to have
official seal for use abroad]
in sub-section (1). the words "that
has a common seal" shall be
omitted;
in sub-section (2), for the words
"must be facsimile of the company’s
common seal, with the addition on
its face of” the words "must add on
the face of it'' shall be substituted:
sub-section (3) shall be omitted;
sub-section (4), the expression '', by
writing under its common seal,"
shall be omitted, and
sub-section (7), the expression 'as if
it had been sealed with the common
seal of the company" shall be
omitted.
—(1) A company that has a common seal may have an official
seal for use outside Pakistan.
(2) The official seal must add on the face of it must be a facsimile
of the company’s common seal, with the addition on its face of
the name of every territory where it is to be used.
(3) The official seal when duly affixed to a document has the
same effect as the company’s common seal.
(4) A company having such an official seal may, by writing under
its common seal, authorise any person appointed for the
purpose in any territory not situate in Pakistan to affix the same
to any deed or other document to which the company is party in
that territory.
(7) A deed or other document to which an official seal is duly
affixed shall bind the company as if it had been sealed with the
common seal of the company.
From this amendment; Company may
have any seal (rubber stamp or other)
and requirement of common seal have
been removed from all sub sections
Section 227. [Contents of directors’
report and statement of
compliance]
in sub-section (2)
(l) any material changes and commitments affecting the financial
position of the company which have occurred between the end
of the financial year of the company to which the financial
statement relates and the date of the report; and
From this amendment; the content of the
Directors report should also be
accompanied with the disclosures
written in the clause (la)

12 | P a g e
in clause (k). after the word
"adequacy" the word "of' shall be
inserted; and
in clause (l). the word "and" at the
end shall be omitted and thereafter,
the following new clause shall be
inserted, namely:-
"(la) disclosure with respect to
remuneration package of each of
the directors and chief executive
including but not limited to salary,
benefits. bonuses, stock options,
pension and other incentives; and'';
and
(la) disclosure with respect to remuneration package of each of
the directors and chief executive including but not limited to
salary, benefits. bonuses, stock options, pension and other
incentives; and'
sub-section (3)
in clause (c), the word "and" at the
end shall be omitted; and
(ii) in clause (d), for the full stop, the
expression "; and" shall be
substituted and thereafter the
following new clause (e) shall be
inserted, namely:-
"(e) the legitimate reasons for not
declaring dividend under section
240 despite earning profits and
future prospects of dividend, if
any."; and
(c) the activities undertaken by the company with regard to
corporate social responsibility during the year; and
(d) directors’ responsibility in respect of adequacy of internal
financial controls as may be specified; and.
(e) the legitimate reasons for not declaring dividend under
section 240 despite earning profits and future prospects of
dividend, if any.";
From this amendment; further to the
above amendment the Directors report
should also declare dividend in
accordance to the section 240 [Certain
restrictions on declaration of dividend], if
not, a legitimate reason should be
written.

13 | P a g e
(6) Whatsoever contravenes any of
the provisions of this section shall-
(a) in respect of a listed company,
be punishable with a penalty of
level 2 on the standard scale; and
(b) in respect of any other company,
be punishable with a penalty of
level 1 on the standard scale-".
(6) Whoever contravenes any of the provisions of this section
shall—
(a) in respect of a listed company, be punishable with a penalty
of level 2 on the standard scale; and
(b) in respect of any other company, be punishable with a
penalty of level 1 on the standard scale-".(a) in respect of a listed
company, be punishable with imprisonment for a term which
may extend to two years and with fine may extend to five
hundred thousand rupees and with a further fine which may
extend to ten thousand rupees for every day after the first during
which the default continues; and
(b) in respect of any other company, be punishable with
imprisonment for a term which may extend to one year and with
fine which may extend to one hundred thousand rupees.
From this amendment; Now the
punishment of imprisonment has been
removed and monetary punishment has
been limited to Level one in case of a
listed Company and Level 1 in case of any
other company, on a standard scale.
Section 243. [Directors not to
withhold declared dividend].
Shall be omitted
243. Directors not to withhold declared dividend.—(1) When a
dividend has been declared, it shall not be lawful for the
directors of the company to withhold or defer its payment and
the chief executive of the company shall be responsible to make
the payment in the manner provided in section 242.
Explanation.—Dividend shall be deemed to have been declared
on the date of the general meeting in case of a dividend declared
or approved in the general meeting and on the date of
commencement of closing of share transfer for purposes of
determination of entitlement of dividend in the case of an
interim dividend and where register of members is not closed for
such purpose, on the date on which such dividend is approved
by the board.
From this amendment; As per section
227 sub section 3 clause (e) through an
illegitimate reason whatsoever, dividend
declaration could be postponed.

14 | P a g e
(2) Where a dividend has been declared by a company but is not
paid within the period specified under section 242, the chief
executive of the company shall be punishable with
imprisonment for a term which may extend to two years and
with fine which may extend to five million rupees: Provided that
no offence shall be deemed to have been committed within the
meaning of the foregoing provisions in the following cases,
namely—
(a) where the dividend could not be paid by reason of the
operation of any law;
(b) where a shareholder has given directions to the
company regarding the payment of the dividend and
those directions cannot be complied with;
(c) where there is a dispute regarding the right to receive
the dividend;
(d) where the dividend has been lawfully adjusted by the
company against any sum due to it from the
shareholder; or
(e) where, for any other reason, the failure to pay the
dividend or to post the warrant within the period
aforesaid was not due to any default on the part of the
company; and
the Commission has, on an application of the company
on the specified form made within forty-five days from
the date of declaration of the dividend, and after
providing an opportunity to the shareholder or person
who may seem to be entitled to receive the dividend of
making representation against the proposed action,
permitted the company to withhold or defer payment as
may be ordered by the Commission.

15 | P a g e
(3) Notwithstanding anything contained in sub-section (2), a
company may withhold the payment of dividend of a member
where the member has not provided the complete information
or documents as specified by the Commission.
(4) Chief executive convicted under sub-section (2) shall from the
day of the conviction cease to hold the office of chief executive
of the company and shall not, for a period of five years from that
day, be eligible to be the chief executive or a director of that
company or any other company.
Section 287. [Powers of Court
under section 286]
for clause (a), the following shall be
substituted, namely: -
(a) the termination, setting aside or
modification of any agreement or
award compensation, however
arrived including but not limited to
between the company or any other
company or any director, including
the chief executive or any other
officer, wherein the Court
concludes that such agreement
suffers from conflict of interest on
the part of any director or the Board
or any such – agreement or contract
is prejudicial to the interest of
members upon such terms and
conditions as may, in the opinion of
(a) the termination, setting aside or modification of any
agreement or award compensation, however arrived including
but not limited to between the company or any other company
or any director, including the chief executive or any other officer,
wherein the Court concludes that such agreement suffers from
conflict of interest on the part of any director or the Board or any
such – agreement or contract is prejudicial to the interest of
members upon such terms and conditions as may, in the opinion
of the Court, be just and equitable in all the circumstances;".
(a) the termination, setting aside or modification of any
agreement, however arrived at between the company and any
director, including the chief executive or other officer, upon such
terms and conditions as may, in the opinion of the Court be just
and equitable in all the circumstances;
From this amendment; award
compensation is also included and the
word included but not limited to has
been inserted so that any other scenario
or person could also claim the suit of
claim in court under section 286. And
also given the statement induce that
court decision will prevail whatsoever it
is.

16 | P a g e
the Court, be just and equitable in
all the circumstances;".
Section 337. [Powers and duties of
official liquidator]
in sub-section (1), in clause (b), the
expression'', and for that purpose,
to use, when necessary, the
company's seal;" shall be omitted
(b) to do all acts and to execute, in the name and on behalf of
the company, all deeds, receipts and other documents, and for
that purpose, to use, when necessary, the company’s seal;
From this amendment; as the definition
and requirement of the common seal has
been removed, therefore, here the word
common seal has also been removed
Section 435. [Documents to be
delivered to registrar by foreign
companies]
sub-section (1), for clause (d) and
(e), the following shall be
substituted, namely:-
"(d) a return showing the full
present and former names and
surnames, present and former
nationality, full address in Pakistan
and such other particulars, as may
be specified, of the principal officer
of company in Pakistan by whatever
name called; and
(e) the full present and former
names and surnames, full addresses
and such other particulars as may
be specified of some one or more
"(d) a return showing the full present and former names and
surnames, present and former nationality, full address in
Pakistan and such other particulars, as may be specified, of the
principal officer of company in Pakistan by whatever name
called; and
(e) the full present and former names and surnames, full
addresses and such other particulars as may be specified of some
one or more persons resident in Pakistan authorized to accept
on behalf of the company service of process and any notice or
other document required to be served on the company together
with his consent to do so; and'';
(d) a return showing the full present and former names and
surnames, father’s name or, in the case of a married woman or
widow, the name of her husband or deceased husband, present
and former nationality, designation and full address in Pakistan
of the principal officer of the company in Pakistan by whatever
name called;
(e) the full present and former names and surnames, father’s
name, or, in case of a married woman or widow, the name of her
From this amendment; any further
speciation could be added by the SECP.

17 | P a g e
persons resident in Pakistan
authorized to accept on behalf of
the company service of process and
any notice or other document
required to be served on the
company together with his consent
to do so; and'';
Sub-section 2 in clause (a), after the
words "each director" the words
"and chief executive'' shall be
inserted: and
after sub-section (3) the following
new sub-section (4) shall be added,
namely:-
"(4) The registrar shall maintain a
register of foreign companies on
paper or in any electronic form
under this Act in such form and
manner as may be specified.".
husband or deceased husband, present and former nationality,
occupation and full addresses of some one or more persons
resident in Pakistan authorised to accept on behalf of the
company service of process and any notice or other document
required to be served on the company together with his consent
to do so; and
(a) with respect to each director and chief executive—
"(4) The registrar shall maintain a register of foreign companies
on paper or in any electronic form under this Act in such form
and manner as may be specified
Sub section 2 (a) , details required for the
directors also required for the CEO as
well.
Furthermore, new insertion regarding
maintenance of the records in SECP has
also been introduce.
Insertion of Section 458A-
[Measures for greater ease of
doing business]
Section 458A- Measures for greater ease of doing business.-
Notwithstanding anything contained in this Act or in any other
law for the time being in force, the Commission may implement
measures for providing greater ease of doing business,
improving regulatory quality and efficiency and facilitating
innovation and the use of technology in conducting business by
the corporate sector. including but not limited to-
(a) formalizing existing practices through regulations and
implementing other measures for attaining intonational
From this amendment; The Commission
may implement any necessary measures
for ease of doing business.
Furthermore, electronic data-based
system and transaction are also
encouraged.
Moreover, SECP may further, give
guidelines from time to time.

18 | P a g e
standards of regulatory quality and efficiency for greater ease of
doing business;
(b) specifying modes and procedures for enabling greater case of
entity into and exit from the market to startup companies;
(c) constituting special task groups from the corporate sector for
encouraging the use of financial technology in the conduct of
business;
(d) creating environments for testing and examining the impact
of innovation, new processes or technologies outside the
existing regulatory framework including but not limited to
crowdfunding & digital assets, open application programming
interface (APIS), smart contracts, cloud-based solutions and
allowing the establishment and use of regulatory sandboxes;
(e) encouraging the use of technology for providing and meeting
regulatory reporting requirements, risk assessment, customer
due diligence, the issuance of suspicious transaction reports,
keeping records and such other requirements as may be
specified to meet anti-money laundering and counter-terrorism
financing standards;
(f) improving regulatory compliance and specifying
proportionate data-driven standards for the corporate sector to
take measures for cyber-security, data soverei8nty and
al8orithm supervision;
(g) specifying exemptions and incentives under the prevailing
laws with the object of fostering innovation, promoting startups
and entrepreneurship ecosystem in line with international best
practices;

19 | P a g e
(h) improving regulatory monitoring, reporting and compliance
requirements; and
(i) prescribing such other frameworks as may be notified by the
Commission for stimulating innovation and financial inclusion in
the conduct of business by the corporate sector through the use
of financial technology, regulatory technology and supervisory
technology
Provided that the Commission may take such other measures
prior to the issuance of regulations as it may deem fit through
guidelines, policy papers, frameworks or any other modes or
mechanisms,"
Thanking you,
• Name : Syed Muhammad Humza Hussain
• Personal Contact : sm_humza@outlook.com, 0092-335-2951436
• Official Email Address : syedhumza@sanaullah.co
Almost 6 years of experience of Corporate Secretarial Services starting from 2015; 3 years in M.S. Consultants, 2 years in Mazars M.F. Co. and 1
year experience in B.D.O Ebrahim Consulting (Private) Limited, now working on Sanaullah and Co. as Deputy Manager Compliance.
Having experience of handling top tire listed companies’ compliances, post-merger compliances, and Incorporation compliance including Section
42 and Specialized Companies (Microfinance, REIT management & VC &PE).
Registration of companies with Board of Investment (BOI), Pakistan Software Export Board (PSEB), Registration of trust including Provident
Funds and gratuity Funds.
NTN registration and filing of Tax returns of individuals AOPs and Companies.

Commentary on companies amendment-act-2021

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Commentary on companies amendment-act-2021

Similar to Commentary on companies amendment-act-2021 (20)

More from Syed Muhammad Humza Hussain

More from Syed Muhammad Humza Hussain (15)

Recently uploaded

Recently uploaded (20)

Commentary on companies amendment-act-2021