President passes amendments to Companies Act

ISLAMABAD: President Dr Arif Alvi has approved amendments in Companies Act 2017, as part of the government’s efforts to loosen it regulatory framework with an aim to springboard the country’s startups, boosting economic activities, the top corporate regulator said on Monday.

Securities and Exchange Commission of Pakistan (SECP) in a statement said these amendments were proposed to help promote and nurture startups as well as attract local and international innovators.

The statement said on the basis of feedback received during the consultation process, various amendments were proposed by the regulator to promote ease of doing business, encourage startups, improve protection of minority shareholders and remove some anomalies noted in the provisions of the Act. These amendments have been enacted through Companies (Amendment) Ordinance, 2020 promulgated on April 30, 2020.

“In order to encourage startups, besides adding definition of startup companies, employees stock options and buyback of shares has been allowed for all companies while earlier this was allowed for public and listed companies only,” the commission said. “These amendments will help address the employee retention and reward issues particularly faced by startup companies. It would also facilitate startups in case, any founding member needs to exit the company.”

Highlighting the key amendments, the SECP said the requirement relating to payment of subscription money within 30 days of incorporation by subscriber and filing of auditor certificate had been done away to facilitate small companies.