The Companies Act 2017 is the statute that governs company law in Pakistan. Its official name is “Companies Act, 2017” and it was notified to be promulgated with immediate effect on 30.05.2017 and published in the official gazette on 31.05.2017 as Act No. XIX of 2017 (the Act).

Previously the company law in Pakistan was governed through the Companies Ordinance, 1984 (1984 Ordinance), now repealed except for the provisions related to Non-banking finance companies (NBFC) contained in Part VIIIA. For provisions related to NBFCs, the 1984 Ordinance is still in force.

The Act came into force with immediate effect except for Section 456. This section deals with the acceptance of advances by real estate companies engaged in real estate projects. It will come into force upon notification by the Federal Government or any authority or person authorized by the Government. Later this section was omitted through an amendment ordinance in 2020. However, the omission was not approved by the Parliament, therefore the section is still part of the law but not effective.

The objective of the Companies Act 2017 SECP

The main objective to replace the previous law with this new law was to:

  • facilitate corporatization and promote the development of the corporate sector
  • encourage the use of technology and electronic means in the conduct of business and regulation
  • regulate corporate entities to protect the interests/rights of shareholders, creditors, other stakeholders, and the general public
  • promote principles of good governance and safeguarding minority interests in corporate entities
  • provide an alternate mechanism for expeditious resolution of corporate disputes and matters arising out of or connected therewith

The Act provides for all aspects of company law, from the formation of a company to winding. It also contains provisions for the management, conduct, and governance of companies. Further, the Act provides guidance and mechanism for dispute resolution through mediation, arbitration, and the courts. The Act has an overriding effect concerning all matters of companies.

Scheme of Companies Act 2017 Pakistan

The Act has been divided into Thirteen (13) parts, each discussing a different aspect related to companies.

The Act also contains or provides through rules and regulations (subordinated legislation) certain schedules, tables, forms, and general rules to govern the law and regulate the companies.

Division of the Companies Act 2017

As discussed, the Act has 13 parts containing legal provisions on different aspects. A brief of the contents of each part is given below:

An outline of the Companies Act 2017 Pakistan

Part I – Preliminary

  • Title of the Act
  • Definitions used in various provisions
  • Overriding effect

Part II – Jurisdiction of Court

  • Which court has jurisdiction?
  • Company benches
  • Procedure for Petition, Application, and Appeals

Part III – Powers and Function of the Securities and Exchange Commission of Pakistan

  • Power and function of SECP under the Act read with Securities and Exchange Commission of Pakistan Act, 1997
  • Reference by Federal Govt. or SECP to Court on significant matters

Part IV – Incorporation of Companies and Incidental Matters

  • Obligation to register certain associations, and partnerships as companies
  • Provisions related to the company name, use of prohibited words in names, and change of name by companies
  • Mode of forming companies and working with less than the required number of members
  • Company incorporation/registration procedure
  • Registration of Memorandum of Association (MOA) and Articles of Association (AOA) and the effect of their registration
  • Commencement of business by public companies
  • Registered office and its publication
  • Capital of a company & its publication
  • Business objects of the company
  • Contents of memorandum of a company limited by shares, a company limited by guarantee, and unlimited company
  • Alteration of MOA
  • Contents of articles of a company limited by shares, a company limited by guarantee, and an unlimited company
  • Alteration of AOA
  • Conversion of a company of one class to another issuance of the certificate of change of status
  • Formation of Not for Profit entities
  • Service and Authentication of documents (company, registrar, member & proceedings)

Part V – The prospectus, Allotment, Issue, and Transfer of Shares and Other Securities

  • Prospectus
  • Classes and kinds of shares (share capital)
  • Variation of rights of shareholders
  • Nature of shares and other securities
  • Certificate of shares and number of shares certificates
  • Debentures
  • Charge on assets of companies
  • Powers and liabilities of trustees
  • Issuance of non-interest-based redeemable capital
  • Procedure for Allotment
  • Return of money for unallotted shares
  • Transfer of shares
  • Board’s power to refuse the transfer of shares and notice of refusal
  • Issuance of shares on commission, premium, and discount
  • Further issue of capital
  • Right Issue of shares
  • Alteration of share capital
  • Invitation to deposits
  • Procedure for Reduction of share capital
  • Unlimited liability of directors in limited company

Part VI – Registration of Mortgages and Charges

  • The requirement to register a mortgage or charge
  • Particulars in case of a series of debentures
  • Register of mortgages and charges
  • Index to register of mortgages and charges
  • Modification of charge
  • Rectification of charge
  • Satisfaction of charge
  • Appointment of receivers and managers and their remuneration
  • Qualification of receivers and managers
  • Power and Duties of Receivers and Managers

Part VII – Management and Administration

This part contains provisions related to the management of the company and the role of shareholders, the board of directors, the Chief Executive Officer (CEO), and other officers of the company. Further, this part provides details on contracts, accounts and audits, dividends, structure, and functions of the board, CEO, and other officers. The requirements for meetings (of board and members) and procedures are also provided in this part.

Provisions related to members

  • Register and index of members & debenture holder
  • Maintenance of Registers
  • Inspection of registers
  • Book closure
  • Court’s power to rectify register
  • Punishment of fraudulent entry
  • Evidentiary value of entries in registers
  • The annual return of the company
  • Record of an ultimate beneficial owner

Meetings and Proceedings

  • Statutory meeting of a public company
  • Annual general meeting (AGM)
  • Extra-ordinary general meeting (EGM)
  • Notice of general meetings
  • The quorum for general meetings
  • Voting in person or through proxy
  • Voting procedure
  • Representation of bodies
  • Special resolution and filing the resolution with the registrar
  • Resolution by circulation
  • Record of resolutions and inspection

Provisions related to Directors

  • Number of directors
  • The first director and their term/retirement
  • Subsequent directors and their election
  • Election procedure
  • Filling casual vacancy
  • Fresh election
  • Ineligibility directors
  • Nominee and alternate director
  • Duties of directors
  • Conflict of interest and disclosure
  • Independent directors
  • Removal of director
  • CCG compliance
  • Consent to act as directors
  • Validity of acts
  • Restriction on remuneration
  • Proceedings of directors

Provisions related to the CEO

  • Qualification of CEO
  • Appointment of 1st and subsequent CEO and his term
  • Removal of CEO
  • Prohibition of competing business

Company Secretary and Share Registrar

  • Public companies to have a secretary
  • Listed to have share registrar
  • Bar on a sole agent
  • Register of Directors and officers

Provisions regarding Investments and Contracts

Provisions related to Accounts

  • Books to be kept by the company
  • Inspection by SECP
  • Financial statements (FS)
  • Classification of companies
  • Contents of FS and directors’ report and statement of compliance and their contents
  • Consolidate FS and financial year of holding and subsidiary company
  • Rights of holding company reps and members
  • FS of Modaraba company to include Modaraba accounts
  • Approval and authentication of FS and send a copy to the registrar
  • Right of member to copy of FS and auditors’ report
  • Penalty for improper issue, circulation & publication of FS
  • Quarterly FS of a listed company
  • Power of commission to require an additional statement of accounts and reports
  • Right of debenture holders to get a copy of FS
  • Penalties


  • Certain restrictions on the declaration of dividends
  • Dividend out of profit only and to registered shareholders only
  • Directors not to withhold declared dividend
  • Unclaimed shares modaraba cert. and dividend to vest in Fed. Govt.
  • Establishment of investor education and awareness fund

Audit and Auditors

  • Appointment removal and fee
  • Qualification and disqualification
  • Right to information
  • Duties
  • Audit of cost accounts
  • Signature of auditor’s report
  • Penalty for non-compliance by companies
  • Penalty for non-compliance by auditor

Powers of Registrar

  • Power of registrar to call for information and explanation
  • Seizure of documents by the registrar, inspector, or investigation officer

Investigation and Related Matters

  • Investigation into affairs of a company
  • Investigation in other cases
  • Serious fraud investigation
  • Inspector to be a court for certain purposes
  • Power of investigation into affairs of associated company
  • Duty of officers to assist the inspector
  • Inspector’s report and prosecution
  • Power of commission to initiate action against management
  • Effect of the court order
  • No compensation for annulment or modification of a contract and loss of office

Powers of Court

  • Application for winding up
  • Proceeding for recovery of damages and property
  • Expenses of investigation
  • Inspector’s report to be evidence
  • Imposition of restrictions on shares and debentures and transfer thereof in certain cases
  • Saving for legal advisors and bankers
  • Effect of winding up petition on Enquiries and investigation
  • Application provisions to liquidators & foreign companies

Part VIII – Mediation, Arbitration, Arrangements, and Reconstruction

  • Mediation and conciliation panel
  • Dispute resolution through mediation
  • Companies’ power to refer matters to arbitration
  • Compromise with creditors and members
  • Commission’s power to enforce compromise and arrangements
  • Info about compromise and arrangement with members and creditors
  • Power of commission to facilitate reconstruction or amalgamation
  • Notice to registrar of applications related to compromises, arrangements, reconstruction, or amalgamation
  • The amalgamation of wholly owned subsidiaries in holding

Part IX – Prevention of Oppression and Mis-management

  • Application to court and court power to issue an interim order
  • Claim for damages inadmissible
  • Application of certain sec. to proceedings under this part
  • Management by administrator
  • Rehabilitation of sick public sector companies

Part X – Winding Up


  • Modes of winding up
  • Liabilities as contributories of present and past members
  • Liabilities of directors with unlimited directors
  • Liability of contributories with fully paid shares
  • Nature of liability of contributory
  • Contributories in case of death of member and insolvency and winding up of body corporate member

Winding up by Court

  • Circumstances of winding up by court
  • Company when deemed unable to pay debts
  • Transfer of proceedings to other courts

Petition for winding up

  • Provision as to winding up petition
  • Right to present a petition in case of voluntary or under court supervision
  • Commencement of winding up by court

Power of court hearing petition

  • The court may grant an injunction
  • Court powers on hearing petition
  • Copy of WU order to be filed with the registrar
  • Stay of suits on winding up order
  • The court may require expeditious disposal of suits
  • Effect of WU order
  • Stay of WU
  • The court may ascertain the wishes of creditors or contributories

Official liquidators (OL)

  • Appointment, removal, remuneration, and title
  • General provisions as to OL
  • Statement of affairs to be made to OL
  • Report by OL and court directions on the report
  • Settlement of contributories list and application of assets
  • Custody of the company’s properties
  • Power to require delivery of property and summon person suspected to have the property of the company
  • Power to order public examination of promoters, directors
  • Power to arrest absconding contributory and order payment of debts by him
  • Power of Court to make calls
  • Power to order payment into the bank
  • Power of regulation of account with the court
  • Order of contributory conclusive evidence
  • Power to exclude creditors not proving in time
  • Adjustment of contributories’ rights
  • Power-to-order costs
  • Power and duties of OL
  • OL to keep a book containing proceedings of meetings
  • OL account
  • Exercise and control of OL Powers
  • Distribution by OL
  • Dissolution of company
  • Saving of other proceedings

Enforcement of Order

  • Power to enforce orders and enforcement by other courts
  • Mode of dealing with enforcement orders of other courts
  • Circumstances of voluntary WU
  • Commencement of Voluntary WU
  • Effect of Voluntary WU on the Status of the Company
  • Notice of resolution of Voluntary WU
  • Declaration of insolvency in case of the proposal of Voluntary WU
  • The Distinction between Members and Creditors Vol. WU
  • Appointment of Liquidator and filling a vacancy in the office of liquidator
  • Notice by the liquidator of his appointment
  • Power of liquidator to accept shares as consideration for the sale of property of the company
  • Duty of liquidator where the