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ISLAMABAD: The National Assembly on Monday unanimously approved Companies Bill 2017.
The piece of legislation became controversial when the government approved it in the form of an ordinance on November 12, 2016 to fulfil certain international obligations. However, on Nov 25, 2016, a resolution signed by 47 senators demanded that the upper house should strike down Companies Ordinance 2016. It was disapproved on Dec 15, 2016.
After its approval in the lower house, the bill will be forwarded to the Senate where the Standing Committee on Finance and Revenue will take it up.
After getting a nod from the Senate, Companies Act 2017 will replace Companies Ordinance, 1984, which was promulgated 32 years ago. There have been 23 amendments in the current Companies Bill 2017, which were approved by the National Assembly’s Standing Committee on Finance. Initially, a total of 50 amendments were proposed by the committee.
PPP MNA Dr Nafisa Shah lauded the treasury bench for accommodating the recommendations forwarded by the opposition. “We had objections to the procedure through which this important law was (first) approved,” she said.
MNAs noted that the new law ensures a balanced regime by incorporating measures relating to the ease of doing business, investor facilitation and stringent enforcement powers and anti-fraud measures.
The bill makes the incorporation of new companies relatively easier and demands fewer filing requirements. The bill includes the option of not filing returns if there is no change in particulars for companies with a paid-up capital of up to Rs3 million. The concept of “inactive company” has been introduced, which will provide owners with the flexibility to keep their company alive with no compliance requirements during the inactive period.
Companies with a paid-up capital of up to Rs1 million are not required to get financial statements audited.
The concept of decision by a circular resolution has also been introduced in the bill. The bill envisages an alternative dispute resolution mechanism, which will help companies save time and hefty legal fees. Amalgamation and merger have been eased as the bill allows the amalgamation of wholly owned subsidiaries into a holding company without formal approval.
Published in Dawn February 7th, 2017
