The National Assembly on Monday unanimously passed ‘The Companies Bill, 2016,’ besides two other bills, to provide relief and incentives to corporate sectors, especially small and medium-sized companies, and curb fraud, money laundering and terror financing.
The other two bills that sailed through the Lower House are ‘The Criminal Laws (amendment) Bill, 2016’ and ‘The Pakistan Air Force (amendment) Bill, 2016,’ which are meant to strengthen the criminal justice system, police and law of evidence to fight terrorism and extremism and for the maintenance of discipline and eradication of corruption respectively. ‘The Pakistan Air Force (amendment) Bill, 2016′ says that it shall come into force at once and shall be deemed to have taken effect on and from the January 1, 2000.
The Companies’ Bill was passed unanimously with many amendments proposed by the opposition benches. Earlier, the Senate had disapproved the Companies Ordinance, 2016 with a majority vote through a resolution. The House was informed that earlier amendments in the Companies Ordinance, 1984 were made in piecemeal and were narrowly focussed, resulting in a disconnect and a overlap in regulatory framework.
“There is a dire need to review and revamp the thirty-two-year old legislation to provide competitive legal framework to the corporate sector in Pakistan,” the House was told. The bill will ensure maximum participation of members in decision making process of the company through the use of modern electronic means of communication, and aims to address the issues relating to protection of interests of minority shareholders and creditors, it says.
“It will facilitate the growth of economy in general and corporate sectors in particular by providing a simplified procedure for ease of starting and doing business, greater protection of investors and augment corporatization in the country,” the bill says. The bill provides adequate manners against fraud, money laundering and terror financing, and necessary provisions have been proposed regarding powers of the commission including joint investigation and the provision requiring officers of a company to take adequate measures to curb such violations, it says.
The bill further aims to give immediate impetus to the economy, and to stimulate economic growth there is an emergent need to promulgate the proposed Companies Bill, 2016 to provide relief and incentives to corporate sectors, especially medium and small sized companies. “The market experts, and business community were at the unison during various stakeholders consultations on the companies law that it should be enacted at the earliest as it will elevate Pakistan’s economy and address longstanding demands of the business community. Unless emergent legislative steps are taken, Pakistan’s corporate sector will not be able to compete with the international market players without a reduction in cost of the incorporating and doing business,” it says.
The encouragement of use of modern communication technology coupled with simplified regulatory procedure, as envisaged in the new company bill, will provide much needed relief to the corporate sector, it says. Moreover, Pakistan has recently been upgraded to emerging market status and there is a huge international interest to invest in Pakistan due to various policies initiatives of the government, it says.
“The expeditious merger and acquisition mechanism is also necessary to address corporate solvency and growth in Pakistan,” the bill says. Shortly after passage of the bill, Finance Minister Senator Ishaq Dar said that a lot of effort was put in to formulate this bill and he was happy to see it passed by the Lower House unanimously.
He said the proposed legislation would help globalise the country’s corporate sector as this would help investors register companies with Securities and Exchange Commission of Pakistan easily.
The minister also said the government would present the much-awaited electoral reforms bill in the House in next session for passage. ‘The Criminal Law (Amendment) Bill, 2016’ says in its statement of object and reason that the whole nation is suffering from the trauma of brutal terrorist attacks, while terrorism, sectarianism and extremism have gripped the whole country and these acts have become order of the day.
The bill also says that in these extraordinary circumstances the leadership of all the parliamentary parties has resolved for taking special measures to root out the evil of terrorism from the country with an exemplary deterrence. This noble objective cannot be achieved without strengthening the criminal justice system, police and the law of evidence. Thereafter, some amendments are proposed in the Pakistan Penal Code, 1860 (Act XIV of 1860), the Police Act, 1861 (V of 1861, the Code of Criminal Procedure, 1898 (Act V of 1898), the Qanoon-e-Shahdat, 1984 (PO No.10 of 1984), and the Protection of Pakistan Act, 2014 (X of 2014) to achieve these objectives.