AS PASSED BY THE MAJLIS E SHOORA PARLIAMENT to reform and re enact the law relating to companies and for matters connected WHEREAS it is expedient to reform company law with the objective of facilitating corporatization and promoting development of corporate sector encouraging use of technology and electronic means in conduct of business and regulation thereof regulating corporate entities for protecting interests of shareholders creditors other stakeholders and general public inculcating principles of good governance and safeguarding minority interests in corporate entities and providing an alternate mechanism for expeditious resolution of corporate disputes and matters arising out of or connected therewith It is hereby enacted as follows An ACT therewith PART I PRELIMINARY 1 Short title extent and commencement 1 This Act may be called the Companies Act 2017 2 It extends to the whole of Pakistan 3 This Act shall come into force at once except section 456 which shall come into force on such date as the Federal Government or an authority or person authorized by it may by notification in the official Gazette appoint 2 Definitions 1 In this Act unless there is anything repugnant in the subject or context 1 advocate shall have the same meaning as assigned to it in section 2 of the Legal Practitioners and Bar Councils Act 1973 XXXV of 1973 2 alter or alteration includes making of additions or omissions without substituting or destroying main scheme of the document 3 articles mean the articles of association of a company framed in accordance with the company law or this Act 4 associated companies and associated undertakings mean any two or more companies or undertakings or a company and an 2 undertaking interconnected with each other in the following manner namely if a person who is owner or a partner or director of a company or undertaking or who directly or indirectly holds or controls shares carrying not less than twenty percent of the voting power in such company or undertaking is also the owner or partner or director of another company or undertaking or directly or indirectly holds or controls shares carrying not less than twenty percent of the voting power in that company or undertaking or if the companies or undertakings are under common management or control or one is the subsidiary of another or a b c if the undertaking is a modaraba managed by the company and a person who is the owner of or a partner or director in a company or undertaking or who so holds or controls shares carrying not less than ten percent of the voting power in a company or undertaking shall be deemed to be an associated person of every such other person and of the person who is the owner of or a partner or director in such other company or undertaking or who so holds or controls such shares in such company or undertaking Provided that i shares shall be deemed to be owned held or controlled by a person if they are owned held or controlled by that person or by the spouse or minor children of the person concerned Minister in Charge ii directorship of a person or persons by virtue of nomination by the Federal Government or as the case may be a Provincial Government or a financial institution directly or indirectly owned or controlled by such Government or National Investment Trust or of iii directorship of a person appointed as an independent director or iv shares owned by the National Investment Trust or a financial indirectly owned or controlled by the Federal Government or a Provincial Government or shares registered in the name of a central depository where such shares are not beneficially owned by the central depository institution directly or 3 shall not be taken into account for determining the status of a company undertaking or person as an associated company associated undertaking or associated person 5 authorised capital or nominal capital means such capital as is authorised by the memorandum of a company to be the maximum amount of share capital of the company 6 banking company means a banking company as defined in clause c of section 5 of the Banking Companies Ordinance 1962 LVII of 1962 7 beneficial ownership of shareholders or officer of a company means ownership of securities beneficially owned held or controlled by any officer or substantial shareholder directly or indirectly either by a him or her b the wife or husband of an officer of a company not being herself or himself an officer of the company c d the minor son or daughter of an officer where son includes step son and daughter includes step daughter and minor means a person under the age of eighteen years in case of a company where such officer or substantial shareholder is a shareholder but to the extent of his proportionate shareholding in the company Provided that control in relation to securities means the power to exercise a controlling influence over the voting power attached thereto Provided further that in case the substantial shareholder is a non natural person only those securities will be treated beneficially owned by it which are held in its name Explanation For this Act substantial shareholder in relation to a company means a person who has an interest in shares of a company the purpose of a the nominal value of which is equal to or more than ten per cent of the issued share capital of the company or b which enables the person to exercise or control the exercise of ten per cent or more of the voting power at a general meeting of the company 8 board in relation to a company means board of directors of the company 4 9 body corporate or corporation includes a a company incorporated under this Act or company law or b a company incorporated outside Pakistan or c a statutory body declared as body corporate in the relevant statute but does not include i a co operative society registered under any law relating to cooperative societies or ii any other entity not being a company as defined in this Act or any other law for the time being which the concerned Minister in Charge of the Federal Government may by notification specify in this behalf 10 book and paper and book or paper includes books of account cost accounting records deeds vouchers writings documents minutes and registers maintained on paper or in electronic form 11 books of account include records maintained in respect of a all sums of money received and expended by a company and matters in relation to which the receipts and expenditure take place b all sales and
View Full Document
Unlocking...