The Securities and Exchange Commission of Pakistan (SECP) has issued a list of prohibited names which cannot be incorporated by new companies, including names associated with any political personality, bureau/division, department, undertaking, court/judiciary/judge and names of international bodies and donor agencies. Through SRO 423(I)/2017 issued here on Wednesday, the SECP has issued draft Companies (Incorporation) Regulations, 2017.
According to the SECP regulations, the following words and combinations thereof shall not be used in the name of a company in English or any of the languages depicting the same meaning : federal government, provincial government, name depicting association with any foreign government, name suggesting association with any political personality, commission, authority, register or registered, co-operative, bureau, division, department, undertaking, municipal, union, republic, nation, president, governor, prime minister, chief minister, minister, cabinet, senate, national assembly, parliament/parliamentary, statute/statutory, court/judiciary/judge, administrator.
The names of international bodies and abbreviations thereof including, but not limited to, United Nations, South Asian Association for Regional Cooperation, Organisation of Islamic Conference, World Bank, International Finance Corporation, Asian Development Bank, Islamic Development Bank, International Monetary Fund, Red Cross, Red Crescent, the SECP maintained.
Provided that the commission may allow any of the said names under special circumstances on the request of any government or authority, the SECP said. The SECP said that any person desirous of forming a company shall apply for reservation of name either online or in physical form. The SECP said that the following words and combinations thereof may only be used in the name of a company subject to the criteria mentioned in each case:
(i) Association or Foundation: In case of companies to be established on grant of licence by the commission under section 42 of the act or which are licensed by the Directorate General of Trade Organisation under the Trade Organisations Act, 2013.
(ii) Fund: In case of a public sector company, a trade organisation, a non-banking finance company to be established to undertake asset management services or private equity and venture capital fund management services subject to prior approval of the commission or a company to be established on grant of licence by the commission under section 42 of the act.
(iii) Council: In case of a company to be established on grant of license by the commission under section 42 of the act. Moreover, this expression any also be allowed to sports association, trade organisation or a professional body. (iv) Chamber: In case of an entity which is to be established as a trade organisation under Trade Organisations Act, 2013.
(v) Trust: In case of non-banking finance company to be established to undertake REIT management services or asset management services subject to prior approval by the commission. (vi) Society: In case of a company if proper justification is provided to the satisfaction of the registrar.
(vii) Assurance/ Assurer/Insurance/Insurer/Re-Assurance/Re-Assurer/ ReInsurance/Re-Insurer: In case of companies to be established to undertake business of insurance, assurance, reinsurance and re-assurance subject to prior approval of the commission.
(viii) Board - In case of a company desirous to engage in the business of paper and /or board or to public sector companies.
(ix) Bahria/Askari/ Fauji/ Fazaiya/Cadet/Armed Forces or forces/Army/Navy/Air Force/Shaheen/Military/Defence - In case of companies to be established by the relevant agency.
(x) Bank/Banking/Banker - In case of companies to be established to undertake banking business subject to prior approval of State Bank of Pakistan or an investment bank subject to prior approval of the commission.
(xi) Bank/Banking/Banker - In case of companies to be established to undertake banking business subject to prior approval of State Bank of Pakistan or an investment bank subject to prior approval of the commission.
(xii) Charter/Chartered - In case of companies having charter from the sovereign authority of the federation or the province.
(xiii) Corporation - In case of companies where proper justification is submitted to the satisfaction of registrar.
(xiv) Exchange/Bourse - In case of securities exchange, commodity exchange, mercantile exchange and exchange company, subject to prior approval from the relevant authority.
(xv) Familiar Trade Name or Brand Names - In case of a company where permission of familiar trade name or brand name user is provided or proper documentary evidence of ownership/use of trade or brand name is furnished by the applicant to the satisfaction of the registrar.
(xvi) Famous/District Personalities - In case of a company where proper justification is submitted to the satisfaction or registrar.
(xvii) Federation - In case of a company licensed under section 42 of the act or trade bodies under Trade Organisations Act, 2013.
(xviii) Federal - In case of a company where it has a connection with or patronage of the federal government subject to prior approval of the commission.
(xix) Province/ Provincial/ Sindh/Punjab/Balochistan/Khyber Pakhtunkhwa/ FATA/ Gilgit-Baltistan/Azad Jammu & Kashmir or AJK - In case of a company where it has a connection with or patronage of the concerned government subject to prior approval of the commission.
(xx) Group - In case of a company where this word implies several companies under single corporate ownership and applicants have to provide evidence of subsidiary/associate relationship with two or more companies.
(xxi) Holding - In case of a company where it qualifies to be a holding company as defined in section 2(37) of the act to the satisfaction of the registrar.
(xxii) Institute/Institution - In case of a company where it has submitted proper justification to the satisfaction of the registrar.
(xxiii) Finance, financial, Investment Finance, Investment Advisory, Leasing, Asset Management, Housing Finance, Modaraba - In case of non-banking finance company subject to prior approval by the commission, Modaraba company brokerage house or any public sector financial institution or investment company.
(xxiv) Name of company containing country name or nationality other than Pakistan - In case of the company where appropriate justification is submitted to the satisfaction of the registrar.
(xxv) Name of company containing names of two countries, ie, Pakistan/Pak and any other foreign country - In case of companies where documentary evidence is provided to the satisfaction of the registrar to support the fact that the company is a joint venture of two governments or companies of two countries.
(xxvi)New/Modern/The/Al/International/Company/Co/Inc/Firm/Partnership/LLP/LLC/Proprietor/Enterprise /Mills/ Factory - In case of a company where proper justification is submitted to the satisfaction of the registrar. However, these expressions will not be acceptable if used to make proposed company name distinctive from existing companies.
(xxvii) State - In case of public sector companies.
(xxviii) University - In case of university management company for the management of university in terms of guidelines of Higher Education Commission (HEC).
The name shall be considered undesirable, if it includes the name of a registered trade mark or a trade mark which is subject of an application for registration, unless the consent of the owner or applicant for registration of the trade mark, as the case may be, has been obtained and produced by the promoters.
The name shall be considered undesirable, if it includes any word or words which are offensive to any section of the people and any other word which in the opinion of registrar is undesirable.
An applicant shall make an application either online or in physical form to the registrar for incorporation of company as per Annexure-IV along with the documents including Memorandum of Association; Articles of Association; copies of CNIC/NICOP of the subscribers/copy of passport in case of foreigner; copies of CNIC of witness sin case of physical filing; authorisation for filing of documents for the proposed company by the subscribers as per Annexure-V in favor of either one of them or registered intermediary; NOC/Letter of Intent/License (if any) of the relevant regulatory authority in case of specialised business as mentioned in regulation 4 and original copy of paid bank challan evidencing the payment of fee specified in Seventh Schedule of the Act.
The registrar shall examine the documents submitted for registration of a company and where he is satisfied that the same are complete in all respects and all requirements of the act and regulation made thereunder relating to incorporation of the company have been complied with, he shall register the memorandum and other document delivered to him. If registration of the memorandum is refused, an appeal can be made to the commission within thirty days of the order of refusal.
On registration of memorandum of association of a company, the registrar shall issue a certificate of incorporation, under his signatures or authenticated by his seal, as per Annexure-VI, which shall be conclusive evidence that the requirements of the act as to registration have been complied with and that the company is duly incorporated under the act.
The certificate of incorporation may be issued electronically or in physical form. A person desirous of forming a single member company shall comply with all the requirements for incorporation of a company as per regulation 5 of these Regulations. The subscriber to the memorandum shall comply with the requirement of the Single Member Companies Rules, 2003.
The subscribers to the memorandum of an association not for profit shall obtain license as per associations not for Profit (Licensing and Corporate Governance) Regulations 2017, before filing application in terms of regulation 5 of these regulations. In case the subscriber is a foreign company, the profile of the company, detail of its directors, the charter, statute or memorandum and articles of the foreign company, and documents of the authorised person duly notarised in the country of origin shall be filed.
The company shall file a certificate by a practising chartered accountant or a cost and management accountant verifying receipt of the money from the subscribers within forty five days from the date of incorporation of the company as per Annexure VII. In case the said certificate isn't filed within the prescribed time period, the shares shall be deemed to be cancelled and the name of the subscriber shall be removed from the register by the registrar.
The registrar shall give directions to the company to either add another shareholder with evidence of payment of share money or direct the company to change its constitution: provided that before giving any such direction, an opportunity of being heard will be granted by the registrar to the company.
The company will be required to comply with the directions within the prescribed time, failing which appropriate action under the act would be initiated by the registrar against the company. Whoever fails or refuses to comply with, or contravenes any provision of these regulations, or knowingly and wilfully authorises or permits such failure, refusal or contravention shall, in addition to any other liability under the act, be also punishable with fine amounting to Rs 5,000, the SECP added.