Amendments in the Companies Regulations, 2020 | ||
Reform ID | F155 | |
Reform Description | Before: Earlier, companies were required to seek Commission’s approval while issuing shares with different rights (under section 6(iv) of the regulations). Only preference shares were permitted to convert into ordinary shares (section 6 (ii)(g) of the Regulations). Mechanism for valuation of immovable property, intangible assets or services was absent since the promulgation of the Companies Act, 2017.
After: Now, requirement for seeking commission’s approval for issuance of shares with different rights has been abolished (under section 6(iv) of the regulations). Similarly, the conversion of one class or kind of shares into another class or kind e.g. ordinary into preference shares etc. is permitted (section 6(2) of the Regulations). A comprehensive mechanism for valuation of immovable property, intangible assets or services is provided in regulation 8(a) of the regulations read with section 460 of the Companies Act, 2017. |
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Sector | All Sectors | |
Beneficiaries | All companies registered with the SECP | |
Jurisdiction/ Location | Federal (Entire Pakistan) | |
Department | Securities and Exchange Commission of Pakistan | |
Date of Implementation | 10.11.2021 | |
Details | Difficulty | The companies were required to seek Commission’s approval while issuing shares with different rights (under section 6(iv) of the regulations). Only preference shares were permitted to convert into ordinary shares (section 6 (ii)(g) of the Regulations). Mechanism for valuation of immovable property, intangible assets or services was absent since the promulgation of the Companies Act, 2017. |
Analysis | It was realized that an amendment in the Companies Regulations, 2020 was required and the same was done to resolve the issues related to shares and their categorization conversion. | |
Solution | The requirement for seeking commission’s approval for issuance of shares with different rights has been abolished (under section 6(iv) of the regulations). Similarly, the conversion of one class or kind of shares into another class or kind e.g. ordinary into preference shares etc. is permitted (section 6(2) of the Regulations). A comprehensive mechanism for valuation of immovable property, intangible assets or services is provided in regulation 8(a) of the regulations read with section 460 of the Companies Act, 2017. | |
Evidence |
Evidence |
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