Governance and Strategy
Companies Act 2017- Significant Amendments May 2020
Pakistan adopted the Companies Act, 1913 right after its creation in 1947. The Companies Act, 1913 remained in operation and existence until the Companies Ordinance, 1984 was promulgated to regulate the corporate entities in Pakistan. The Companies Ordinance, 1984 was a major breakthrough in terms of streamlining of corporate laws keeping in view the local business environment and it governed the corporate regime for more than three decades.
The lawmakers of our beloved Country once again united their brains and promulgated the Companies Act, 2017 which replaced the Companies Ordinance, 1984, yet again coming up with major overhauling of the Supreme Corporate Law as applicable in Pakistan. In continuation of those efforts, the most recent development is the promulgation of Companies (Amendment) Ordinance, 2020 by the President of Pakistan. This ordinance has been promulgated by the President of Pakistan under Article 89 of the Constitution of the Islamic Republic of Pakistan (the Constitution).
The life of amendments introduced through this Ordinance is 120 days unless approved by the Parliament through specific process of law. Under the Constitution, this Ordinance shall be laid before the Parliament for enactment with or without amendments. These amendments shall stand repealed after 120 days of the promulgation date, if not enacted or extended by the Parliament. The Ordinance can be extended only once by either House.
These amendments have been made in the context of Ease of Doing Business. At the same time, certain powers previously given conferred on the Minister in Charge to ease out the process have now been taken away, in most of the cases.
Download the document below containing significant changes in the Companies Act 2017 for the interest of Clients and Associates.