Government committee suggests substantial revisions to Companies Act of 2017
Modernizing Pakistan's Companies Act to Align with Global Standards
Pakistan is set to modernize its Companies Act 2017 with a focus on removing unnecessary restrictions and outdated procedures that hinder business growth and innovation. The latest recommendations, discussed in a high-level meeting, aim to remove the minimum and maximum limits on the number of members in private and public companies, introduce greater flexibility in corporate structures, and eliminate procedural hurdles.
The meeting, chaired by Haroon Akhtar Khan, Special Assistant to the Prime Minister on Industries and Production, was attended by representatives from the Board of Investment (BOI), the Securities and Exchange Commission of Pakistan (SECP), and the State Bank of Pakistan (SBP). The aim is to swiftly translate these agreed recommendations into draft legislation to support Pakistan’s business environment modernization.
The proposed reforms include the elimination of member limits, which would allow more adaptability in company formation and growth. They also aim to increase flexibility in corporate forms, enabling companies to design more diverse and innovative structures that better suit modern business environments. Furthermore, the reforms are intended to remove unnecessary restrictions and procedural delays, streamlining regulatory requirements to reduce red tape and facilitate ease of doing business and corporate innovation.
The SECP and BOI jointly presented a package of recommendations aimed at modernizing the Companies Act. This overhaul is part of Pakistan’s broader effort to update corporate laws to be on par with global standards and encourage enterprise growth by fostering a more dynamic and flexible corporate regulatory framework.
The reforms discussed in the meeting are aimed at bringing Pakistan's corporate framework in line with international best practices. By easing regulatory burdens and removing restrictions no longer relevant to current commercial realities, Pakistan hopes to attract more investment and foster a more vibrant and innovative business environment.
[1] The News International [2] Dawn News [3] Business Recorder [4] The Express Tribune
- The proposed reforms to Pakistan's Companies Act, as discussed in the meeting, aim to increase flexibility within the industry by eliminating member limits and introducing diverse corporate structures, aligning with global standards of finance and business.
- To boost Pakistan's business environment and attract foreign investment, the SECP and BOI's presented package of recommendations focuses on modernizing the Companies Act, removing unnecessary restrictions, and adopting international best practices in finance and business.
