President Dr. Arif Alvi has approved alterations to the companies acts, in order to provide an enabling regulatory framework to facilitate startups in the country, a press release by the Securities and Exchange Commission of Pakistan (SECP) said.
Dr. Arif Alvi approves the alterations in companies acts. According to the statement, these alterations were proposed by the SECP to help “promote and nurture startups” while also attracting local and international innovators.
The Companies Act, 2017 was reviewed by the SECP in consultation with various external and internal stakeholders.
On the basis of the feedback received during the consultation process, various amendments were proposed by the regulator to promote ease of doing business, encourage startups, improve the protection of minority shareholders and remove some anomalies noted in the provisions of the Act.
It added that the amendments have been promulgated through the Companies (Amendment) Ordinance.
Under the new rules, employee stock options and buyback of shares have been allowed for all companies; earlier this was allowed for public and listed companies only.
These amendments will help address employee retention and reward issues faced by startups. They will also facilitate startups in case the founding member needs to exit the company.
Further, requirements relating to “payment of subscription money within 30 days of incorporation by subscriber and filing of auditor certificate has been done away [with] to facilitate small companies”.
Now, a listed company may hold an extraordinary general meeting at shorter notice with the commission’s approval, the press release said, adding that all companies will be required to file annual returns with the registrar.
The amendments, in addition to improving ease of doing business, will also positively impact the country’s position in global rankings, the statement concluded.