ISLAMABAD, Dec 16: Securities and Exchange Commission of Pakistan (SECP) announced here Tuesday drastic reduction in fee payable by promoters for incorporation of companies to encourage corporatization in the country, according to official spokesman.

In this regard, the Commission has amended the Sixth Schedule to the Companies Ordinance, 1984 with the approval of the federal government.

Accordingly, the basic fee slab for registration of companies has been reduced by 50 per cent from Rs5000 to Rs2500. Likewise, the authorized capital on which minimum fee is payable has been reduced from Rs500,000 to Rs100,000.

As a result of these amendments, the spokesman stated, a company with authorized capital of Rs100,000 can be incorporated on the payment of only Rs2,500 as registration fee.

Previously, the fee structure comprised three basic slabs: a fee of Rs5000 to be charged from companies having nominal share capital of up to Rs500,000, a fee of Rs500 to be charged for every Rs100,000 up to nominal share capital of Rs5,000,000 and a fee of Rs250 for every Rs100,000 of the nominal share capital, after the first Rs5,000,000, subject to a maximum fee of Rs10 million.

The reduction in registration fee is expected to encourage especially the small and single member companies having nominal share capital to get themselves incorporated, he added.

Besides these concessions in fees, the spokesman recalled, the SECP had already persuaded the provincial governments to reduce the stamp duty payable by companies for registration of their Memorandum and Articles of Association with the Registrar of Companies.

Consequent upon these efforts, the government of Punjab has reduced the said duty from Rs8,000 to Rs2,000, the government of Sindh from Rs7,000 to Rs3,000, and the government of Balochistan from Rs7,000 to Rs700 only. The stamp duty applicable in Islamabad Capital Territory is already Rs260 only.

A notification incorporating these changes has been published in official Gazette vide SRO 1095(1)/2003 dated December 9, 2003. The amending notification is available on the SEC website www.secp.gov.pk.