The Securities and Exchange Commission of Pakistan (SECP) has proposed to issue instructions to State Bank of Pakistan (SBP) for freezing of bank accounts of the inactive companies and to Federal Board of Revenue for inactivation of National Tax Number (NTN) and Sales Tax Registration Numbers (STRNs) of inactive companies.
Through SRO 1026(I)/2017, the SECP has issued draft Companies (Compliance and Reporting) Regulations, 2017 regarding companies which are inactive as per register of the SECP.As per proposed regulations, the registrar shall issue instructions to State Bank of Pakistan for freezing of bank accounts of the company and to Federal Board of Revenue for inactivation of National tax number and sales tax number on next day of entry of name of a company in the register of inactive companies.
Under the said draft regulations, subject to the provisions of section 424 of the Companies Act, the company, other than a listed company, which is formed for a future project or to hold an asset or intellectual property and has no significant accounting transaction or an inactive company, may file an application to the registrar as per Annexure-C71 along with payment of fee for obtaining the status of an inactive company.
The registrar on being satisfied with the application shall allow the status of inactive company to the applicant and issue a certificate as per Annexure- R17 to that effect. The registrar shall maintain a register of inactive companies as per Annexure R18, SECP said.
In case of a company, other than a listed company, which has not filed financial statement or annual returns, where applicable, for two financial years consecutively, the registrar shall issue a notice to that company providing an opportunity of hearing and in case the company fails to appear before the registrar or fails to file the overdue annual returns and financial statement, the registrar shall issue a final notice providing an opportunity of hearing.
In case the company again fails to appear before the registrar or fails to file the overdue returns and financial statement, the registrar shall enter the name of such company in the register maintained for inactive companies. An inactive company shall comply with the following requirements to retain its inactive status in the register shall have minimum number of one director in case of a single member company, two directors in case of a private limited company and three directors in case of public limited company:
It shall submit an undertaking as per Annexure C72 on annual basis stating that the company has not commenced operations and pay such annual fee as prescribed in the Seventh Schedule.
A company which was granted status of inactive company owing to non-filing of annual returns and financial statements may apply to the registrar to become an active company as per Annexure C73 along with payment of fee and documents for the period during which the company remained inactive including Financial statements; and Annual returns.
Any other company which was earlier granted status of inactive company and now desirous of starting operations may apply to the registrar to become active company as per Annexure C73 along with payment of fee.
The registrar on being satisfied with the application shall allow the status of active company to the applicant and issue a certificate as per Annexure R19 to that effect and shall issue instructions to State Bank of Pakistan for unfreezing of bank accounts of the company and to Federal Board of Revenue for activation of National tax number and sales tax number on next day of removal of name of a company in the register of inactive companies. The registrar shall strike off the name of an inactive company from the register of inactive companies, which has failed to comply with the requirements of this regulation and section 424 of the Act, the SECP added.
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