'Only PM can make a difference'

The editorial "Only PM can make a difference" carried by Business Recorder on December 9 contains undue criticism of the recently promulgated Companies Ordinance, 2016. There was a dire need to replace the 32-year-old Companies Ordinance, 1984 and make a new law that would be in conformity with the best international practices to facilitate the corporate sector and to ensure ease of doing business in the country. While drafting the new law, the Securities and Exchange Commission of Pakistan (SECP) carried out extensive consultations with all the stakeholders, including chambers of commerce, professional associations, business community, corporate practitioners and others. Various consultation sessions were held across the country, two of which were chaired by the Finance Minister. The recommendations received from all quarters were fully studied and taken into consideration before finalising the law.
In order to ensure continuing stakeholder consultation on the new law, the SECP chairman has also constituted a committee, which would appraise the corporate sector of the new law. It shall respond to queries from all the stakeholders, including the general public. The government has promulgated the new law through an ordinance so that corporate sector may immediately benefit from the reforms introduced. The work on the revised company law was initiated by the SECP in 2005, and subsequently even after a lapse of more than a decade, the law could not be finalised this was creating a number of problems for the stakeholders in view of rapid changes in the business environment, especially the advances in information technology.
Although the ordinance has been issued, all legal formalities for the approval of ordinance from Parliament shall be followed. At present, a subcommittee of the National Assembly's Standing Committee on Finance is debating the new law extensively. The suggestions and recommendations of parliamentarians will be incorporated in the law.
Ever since its establishment, the SECP has taken a host of reform measures, which have resulted in robust corporate growth in the country, leading to formalisation of the business sector and documentation of economy. More recently, the SECP has restructured operations at the three Company Registration Offices in Islamabad, Lahore and Karachi. Incorporation and facilitation desks have been established, which ensure facilitation to the general public so that the companies are incorporated within a day.
Further, in order to reduce the turnaround time in business start-up and ease the process of incorporation, registration of companies with a single object has been allowed under the new company law, which will enable registration of companies on the same day provided the company formation documents are filed under online mode. This swift mode of registration is likely to further encourage corporatization of the business sector. Other recent reform measures include drastic reduction in the fee for the incorporation of company, filing of returns, provision of one set of complimentary copy of the incorporation documents and of the accepted returns, etc.
Based on the reform measures during the last couple of years, the country's ranking in the doing business indicator has improved. In the recently released World Bank Doing Business Report 2017, Pakistan has been named as one of top ten countries classified as most improved economies in 2015-16. Overall doing-business ranking has improved by four notches from 148 to 144, and Distance to Frontier score has improved by 2.29 % points. In the starting-a-business indicator, Pakistan has a ranking of 141 and stands favourably against India ranked at 155. As a result of reform measures taken during the year 2015-16, the total number of days to start a business has decreased by one day from 19 in the last one year, and the total cost as percentage of per capita income has decreased from 13.9% to 12.4%.