ISLAMABAD, May 25: The Corporate Law Review Commission (CLRC) has recommended to the Securities and Exchange Commission of Pakistan (SECP) to engage consultants for drafting a new company law.

The consultants will be guided by a sub-committee of the CLRC to ensure that the new law is drafted in light of the conceptual framework provided in its concept paper and recommendations received from the stakeholders.

The Corporate Law Review Commission here on Thursday presented to the SECP its concept paper on review of the Companies Ordinance, 1984. The paper determined whether the ordinance needed to be amended or a new law was required, stated an official announcement.

The CLRC was established by the Securities and Exchange Commission of Pakistan in November last year to carry out a holistic examination of the ordinance, headed by Justice (retd) Ajmal Mian.

The concept paper is the first deliverable required to be submitted by the Corporate Law Review Commission under its terms of reference and has been prepared after extensive deliberations amongst the members and in light of international standards as well as oral and written submissions received from the stakeholders throughout the country, states the announcement.

It makes recommendations for the conceptual framework of law as well as its contents. With regard to the conceptual framework, the paper recommends that the new company law should be clear, concise and comprehensible, providing certainty as well as flexibility to investors.

The Corporate Law Review Commission further recommends that the law should be a core company law, regulating all aspects of the life cycle of an entity rather than its activity and has identified the broad areas for inclusion in such core company law. It has also proposed a new formulation for objectives of the law which should reflect the pressing economic concerns of today.

The paper emphasises the importance of formation of groups of companies as well as the conversion of companies from one form to another. It places considerable emphasis on the protection of minority shareholders and makes several recommendations in this regard. Important changes have also been recommended in the area of management and governance of companies, particularly with respect to the extent of directors’ fiduciary duty towards a company.