The Securities and Exchange Commission of Pakistan (SECP) has decided to place additional requirements and documentations for foreign companies operating in Pakistan by seeking additional information from foreign subscribers including foreign companies or foreign body corporate. In this regard, the SECP has issued SRO 274(I)/2018 to issue draft amendments to the Companies (Incorporation) Regulations, 2017. Under the revised regulations, the SECP has placed additional requirements for foreign subscribers and security clearance.
Additional requirements for foreign subscribers and security clearance: in case the subscriber is a foreign company or a foreign body corporate, the registrar shall require additional information including but not limited to, the profile of the foreign company or foreign body corporate, detail of its directors, their nationality and country of origin, copy of its charter, statute or memorandum and articles etc, the SECP said.
Provided that the copy of any charter, statute, memorandum, articles or other instrument, constituting or defining the constitution of a foreign company or a foreign body corporate required to be filed with the registrar shall be duly certified to be a true copy by the public officer in the country where the foreign company or foreign body corporate is incorporated to whose custody the original is committed; or a notary public of the country where the foreign company or foreign body corporate is incorporated; or an affidavit of a responsible officer of the foreign company or foreign body corporate in the country where the company is incorporated, the SECP said.
Provided further that the signature and seal of the official referred to in clause (i) or the certificate of the notary public referred to in clause (ii) above shall be authenticated by a Pakistan diplomatic consular or consulate officer and the certificate of the officer of the foreign company or foreign body corporate referred to in clause (iii) above shall be signed before a Pakistan diplomatic consular or consulate officer, the SECP said.
In case the subscriber to the memorandum is an individual of foreign nationality, he may be required to file additional documents as deemed necessary by the registrar. The Commission shall obtain security clearance from Ministry of Interior (MoI) in following cases and in the manner prescribed. The companies having foreign (other than Afghan and Indian national or origin) subscribers/officers will be incorporated on the basis of an undertaking and case shall be forwarded for security clearance. Provided that in case name of subscriber/officer is not security cleared by MoI, the subscriber/officer and the company, shall take immediate steps for replacement and shall transfer shares if any, held by the subscriber; companies having foreign subscribers/officers who are Afghan or Indian national or of Afghan or Indian origin will be incorporated after receipt of security clearance and security services provider companies will be incorporated after receipt of security clearance from the MoI.
The SECP said that the manner of security clearance shall be subject to any change in the security policy of government from time to time. Following is the text of the SSRO issued by the SECP here on Saturday: SRO 274(I)/2018.- The following draft amendments to the Companies (Incorporation) Regulations, 2017 proposed to made by the Securities and Exchange Commission of Pakistan in exercise of the powers conferred by section 512 read with section 10, 14, 16 and 17 of Companies Act 2017 (XIX of 2017) are hereby published as required by proviso to the said section 512, for information of all the persons likely to be effected thereby and notice is hereby given that suggestions or objections, if any, received within a period of fourteen days from the date of its publication in the official gazette, shall be taken in to consideration by the Securities and Exchange Commission of Pakistan, namely:-
DRAFT AMENDMENTS
In the aforesaid Regulations,-
(1) In regulation 2, in sub-regulation (1), -
(a) for clause (ii), the following shall be substituted, namely: -
"(ii) "annexure" means an annexure appended to these regulations;";
(b) after clause (ii) substituted as aforesaid, the following new clause shall be inserted, namely:-
"(iia) "authorized intermediary" shall have the same meaning as assigned to it in clause (iii) of sub-regulation (1) of regulation 2 of the Intermediaries (Registration) Regulations, 2017;"
(c) after clause (iii), the following new clause shall be inserted, namely:- "(iiia) "form" means form appended to these regulations; and";
(2) for regulation 3, the following shall be substituted, namely: -
"3. Reservation of Name. - (1) Any person desirous of forming a company shall have the option to file either separate application for reservation of name in the manner as provided in sub-regulation (2) of this regulation or combined application for reservation of name and incorporation of company in the manner as provided in sub-regulation (3) of regulation 5.
(2) Separate application for reservation of name in terms of sub-section (4) of section 10 of the Act shall be made along with non-refundable application fee as specified in Seventh Schedule of the Act, in the following manner,-
(i) online application through e-service; or
(ii) physical application as per Inc Form-I of the regulations with the registrar.
(3) The applicant may propose up to three names in order of priority for reservation of any one of them, ensuring that the proposed names fulfill the criteria specified in section 10 of the Act and these regulations.
(4) The registrar, if satisfied that any one of the proposed names in the order of priority, fulfills the criteria specified in the Act and these regulations, may issue availability of name as per Inc Annexure-I for a period of sixty days from the date of availability of name letter.
(5) If the applicant fails to file application for incorporation of company along with evidence of payment of fee within sixty days period, the name shall not remain available.
(6) In case of refusal of the proposed name, the registrar shall issue the order of refusal as per Inc Annexure-II. (7) The registrar, while considering the application for reservation of name may require the applicant to furnish such additional information as deemed appropriate:
Provided that where the requisite information is not provided within fifteen days or any further time allowed by the registrar, the application shall be disposed of on the basis of available information";
(3) after regulation (3) substituted as aforesaid, the following new regulation shall be inserted, namely:-
"3A. Modes of payment of fee.-The fee as per Seventh Schedule of the Act as required under these regulations, may be paid through-
(a) credit card; or
(b) debit card; or
(c) other mode of online payment made available by the Commission; or
(d) challan in the designated branch of the bank.";
(4) in regulation 4, -
(a) in sub-regulation (1), in clause (i), -
(i) after the words and comma "National Assembly," the words and comma "Provincial Assembly," shall be inserted;
(ii) after the words and comma "Judge,", the words and comma "Jury," shall be inserted;
(b) in sub-regulation (2), -
(i) after the words "the following words", the words "or acronyms" shall be inserted;
(ii) after clause (x), the following new clause shall be inserted, namely:-
"(xa) Chapter - In case of companies where NOC or permission of the organization/entities having various chapters locally or globally, is provided.";
(iii) clause (xiv) shall be omitted;
(iv) for clause (xv), the following shall be substituted, namely:-
"(xv) Famous/Distinct Personalities - In case of individual, where no objection certificate from the personality is provided and in case of a company where proper justification is submitted to the satisfaction of registrar.";
(v) in clause (xxiv), for the words "of two countries" at the end, the words "or individuals of two relevant countries" shall be substituted; and
(c) in sub-regulation (3), clause (i) shall be omitted;
(5) for regulation 5, the following shall be substituted, namely:-
"5. Application for incorporation of company. (1) An application for incorporation of company along with specified fee, shall be filed in any of the following modes, namely:-
(i) separate application for incorporation of company in the manner as provided in sub-regulation (2); or
(ii) combined application for reservation of name and incorporation of company in the manner as provided in sub-regulation (3).
(2) An applicant shall make separate application for incorporation of company either online through e-service or in physical form to the registrar as per Inc. Form-II along with the following documents,-
(i) memorandum (in case of online application, e-service shall automatically generate memorandum on the basis of information provided by the applicant except for companies having specialized business);
(ii) articles where required;
(iii) copies of valid NIC/NICOP (national identity card/ national identity card for overseas Pakistanis) of the subscribers/ directors/chief executive officer or copies of valid Passport in case of a foreigner;
(iv) in case of a single member company copy of valid NIC/NICOP of nominee or copy of valid Passport in case of a foreigner;
(v) a copy of NIC of witness in case of physical filing of application; (vi) in case of physical application, authority letter on stamp paper of requisite value in favor of any one of the subscribers or registered intermediary, authorizing him to file documents for incorporation of company on behalf of subscribers, make correction therein, if required and collect certificate of incorporation and other documents after incorporation of company. The authority letter shall be witnessed with his particulars and shall also be notarized;
(vii) NOC/Letter of Intent/License (if any)/approval letter of the relevant regulatory authority in case of specialized business as mentioned in regulation 4;
(viii) in case of physical application, original paid bank challan or other evidence of payment of fee specified in Seventh Schedule of the Act.
(ix) a copy of valid NIC/Passport of person duly authorized by the Board of directors of a body corporate which is a subscriber along with copy of Board resolution. In case of a subscriber which is a limited liability partnership, copy of valid NIC/Passport of designated partner empowered to act as such, along with copy of instrument empowering him.
(x) In case the subscriber is a foreign company or a foreign body corporate, the profile of the company, detail of its directors, their nationality and country of origin, certified copy of its charter, statute or memorandum and articles, etc.
(3) The combined application for reservation of name and incorporation of company limited by shares shall be filed online through eservice on payment of fee along with scanned copies of only relevant and applicable documents, as mentioned in sub-regulation (2) except memorandum of association and articles of association, which shall be generated by e-service:
Provided that facility of combined application shall not be available for companies to be formed to carry on or engage in any business which is subject to a license or registration, permission or approval as required under the respective law:
Provided further that the applicant shall enter three names for the proposed company in the order of priority, out of which any one may be approved by the registrar subject to fulfillment of criteria mentioned in section 10 of the Act and in these regulations. If the name as per option one is not available, the name from other options in order of priority shall be considered for incorporation and in case of refusal of the proposed names, the registrar shall issue the order of refusal as per Inc.
(4) Any person may obtain certified copies of the extract of information contained in item 2.1 or 2.2 of Part-II (A), Part-II (D), Part-II (E) and Part-III of Inc. Form-II."
(6) In regulation 6, -
(a) in sub-regulation (1), in Explanation,-
(i) for the word "means", the word " includes" shall be substituted;
(ii) after the words "the Commission", the words "or any other government authority" shall be added; and
(b) sub-regulations (2) and (3) shall be omitted;
(7) for regulation 7, the following shall be substituted, namely: -
"7. Articles of Association.- (1) In case, the subscribers opt to file combined application for reservation of name and incorporation of company in the manner specified under sub-regulation (3) of regulation (5), the articles as per Table A of First Schedule to the Act shall be the articles of the company.
(2) In all other cases, the subscribers of the company limited by shares may adopt the articles as per Table A of First Schedule to the Act and notify the same to the registrar concerned as per Inc. Form-II and filing of articles separately shall not be required by company adopting Table A:
Provided that in case articles as per Table A of the First Schedule to the Act are not adopted, the company limited by shares shall file the articles with the registrar along with application for incorporation.
(3) In the case of a company limited by guarantee or an unlimited company, the company shall file the articles with the registrar along with application for incorporation.";
(8) after regulation (7) substituted as aforesaid, the following new regulation shall be inserted, namely: -
"7A. Signing of memorandum of association and articles of association. - (1) The memorandum and articles of the company shall be signed physically or electronically, as the case may be, by each subscriber to the memorandum and articles of association and where required, to be witnessed.
(2) Where a subscriber is other than a natural person, the memorandum and articles of association shall be signed by a natural person on its behalf in the following manner:
(i) in case of a body corporate, duly authorized by a resolution of the board of directors;
(ii) in case of a limited liability partnership, a designated partner empowered to act as such, along with copy of instrument empowering him; and
(iii) in any other case by an authorized representative duly authorized to sign as such.";
(9) in regulation 8, in sub-regulation (3), for the expression "Annexure-IV", the expression "Inc. Form-II" shall be substituted;
(10) in regulation 9, -
(a) in sub-regulation (1),
(i) for clause (i), the following shall be substituted, namely:- "(i) a subscriber, in case of a Pakistani national, shall also specify number of his valid NIC/NICOP and in the case of foreign national, number of his valid passport.";
(ii) in clause (ii), after the words, "documents shall", the words, "likewise", shall be inserted;
(11) in regulation 11, in sub-regulation (4), for the words, "Memorandum", the words, "memorandum and other documents", shall be substituted;
(12) in regulation 12, in sub-regulation (1), for the expression "Annexure-VI", the expression "Inc. Form-III" shall be substituted;
(13) in regulation 14, for the expression "as per Associations with charitable and not for profit objects (Licensing and Corporate Governance) Regulations, 2017", the expression "under section 42 of the Act" shall be substituted;
(14) for regulation 15, the following shall be substituted, namely: -
"15. Additional requirements for foreign subscribers and security clearance.- (1) In case the subscriber is a foreign company or a foreign body corporate, the registrar shall require additional information including but not limited to, the profile of the foreign company or foreign body corporate, detail of its directors, their nationality and country of origin, copy of its charter, statute or memorandum and articles etc.:
Provided that the copy of any charter, statute, memorandum, articles or other instrument, constituting or defining the constitution of a foreign company or a foreign body corporate required to be filed with the registrar shall be duly certified to be a true copy by -
(i) the public officer in the country where the foreign company or foreign body corporate is incorporated to whose custody the original is committed; or
(ii) a notary public of the country where the foreign company or foreign body corporate is incorporated; or
(iii) an affidavit of a responsible officer of the foreign company or foreign body corporate in the country where the company is incorporated
Provided further that the signature and seal of the official referred to in clause (i) or the certificate of the notary public referred to in clause (ii) above shall be authenticated by a Pakistan diplomatic consular or consulate officer and the certificate of the officer of the foreign company or foreign body corporate referred to in clause (iii) above shall be signed before a Pakistan diplomatic consular or consulate officer.
(2) In case the subscriber to the memorandum is an individual of foreign nationality, he may be required to file additional documents as deemed necessary by the registrar.
(3) The Commission shall obtain security clearance from Ministry of Interior (MoI) in following cases and in the manner prescribed hereunder:
(i) companies having foreign (other than Afghan and Indian national or origin) subscribers/officers will be incorporated on the basis of an undertaking and case shall be forwarded for security clearance:
Provided that in case name of subscriber/officer is not security cleared by MoI, the subscriber/officer and the company, shall take immediate steps for replacement and shall transfer shares if any, held by the subscriber;
(ii) companies having foreign subscribers/officers who are Afghan or Indian national or of Afghan or Indian Origin will be incorporated after receipt of security clearance;
(iii) security services provider companies will be incorporated after receipt of security clearance from MoI:
(4) The manner of security clearance shall be subject to any change in the security policy of government from time to time."
(15) regulation (16) shall be omitted.