The Securities and Exchange Commission of Pakistan (SECP) is planning to disallow facility of Easy Exit Scheme to certain categories of companies including foreign companies, subsidiaries of listed companies, trade organizations, companies which have outstanding liabilities and companies against which investigations, inquiries or inspections are pending. Under SRO No. 1026(I)/2017, the SECP has recently issued draft Companies (Compliance and Reporting) Regulations, 2017.
According to the regulations, subject to the provisions of section 426 of the Companies Act, a private company or a public non-listed company including those licensed under section 42 of the Act, which ceases to operate and has no known assets and liabilities, may apply to the registrar as per sub-regulation (2) seeking to strike its name off the register of companies.
Provided that this facility is not available to the following companies: subsidiaries of listed companies; foreign companies; trade organizations licensed under the Trade Organization Act, 2013; companies which have liabilities outstanding in relation to any loan obtained from the banks or financial institutions, taxes, utility charges, or any obligations towards government departments or private parties; companies against which investigations, inquiries or inspections are either pending or are in the process of initiation or any matter/prosecution is pending before the court or any other competent authority; companies having dispute regarding management or shareholding; companies found involved in illegalities or fraudulent activities; housing and real estate development or real estate marketing companies and companies involved in soliciting public deposits and repayment thereof or delivery of promised goods or services there against is yet not completed.
The company which fulfils the criteria specified and is desirous to strike its name off the register of companies, may file with the registrar an application as per Annexure C67with payment of fee, copy of members' resolution as specified on Annexure C68; copy of the minutes of meeting specifically containing the view point of the dissenting member, if any; a declaration/indemnity on Annexure C69 by at least three fourth majority of the directors including chief executive of the company, duly verified by an affidavit administered before the class I magistrate or oath commissioner/notary public; and auditors' certificate, from a person not disqualified to act as an auditor of the company under the act, on the format given in the Annexure C70:
Provided that the public company and its subsidiary, and private company having paid-up capital of three million rupees or more shall furnish the certificate from a chartered accountant within the meaning of Chartered Accountants Ordinance, 1961.
Where an application received under sub-regulation (2), is made by a company formed or operating under any licensing regime, or which has been granted approval, registration or enrolment by any authority or entity, such application shall be accompanied with no objection certificate from that respective authority or entity.
Where an application received under sub-regulation (2), is made by a public sector company as defined in Public Sector Companies (Corporate Governance) Rules, 2013, such application shall be accompanied with, no objection certificate or approval from controlling government, any instrumentality, or agency Of government or statutory body, as the case may be, and such further information as the Commission may deem fit.
The registrar shall, while examining the application received under sub-regulation (2), ensure that all the requirements in respect of filing the application have been complied with. The registrar, while considering the application may require the applicant to furnish such further information or clarification as it may deem appropriate, and communicate the deficiency, if any, contained in the application, to the applicant.
The applicant shall remove the deficiencies referred, within thirty days from the date of communication of the same, or such an extended time as the registrar may allow: provided that if the applicant fails to remove the deficiencies within the specified time, the application shall be deemed to have been declined and the applicant may be informed accordingly.
After examination of the application, the registrar may publish a notice, in the official gazette stating that at the expiration of ninety days from the date of that notice, unless cause is shown to the contrary, the name of the applicant company will be struck off the register of companies and the company will be dissolved. Such notice shall also be posted on the Commission's website. Where any objection or reservation is received during notice period, the registrar shall examine the same in detail to decide the application and inform the applicant accordingly. Where no objection or reservation is received, and the registrar is satisfied that the applicant company has no known assets and liabilities, and is not carrying on any business, on the expiration of time mentioned in the notice, the registrar may strike off the name of the applicant company from the register and send notice for publication in the Official Gazette, and on publication thereof the applicant company shall be dissolve, the SECP added.