AMENDMENTS IN THE COMPANIES’ ACT 2017 THROUGH THE 
           COMPANIES (AMENDMENT) ACT, 2021.
                                                
         
         
         
         
         
         
         
      www.hzco.com.pk 
            
           Foreword 
            
           This document presents a summary and a comparative matrix of the changes made in the Companies Act, 2017 (Act, 2017) through the 
           Companies (Amendment) Act, 2021.  
           The Companies (Amendment) Act, 2021 has been passed by the National Assembly of Pakistan on June 10th
                                                                                         2021 and is yet to be presented 
           before the Senate of Pakistan. For updates in this regard and for a pdf copy of this document please visit our website hzco.com.pk. 
            
            
            
            
            
                                        
            
                                                  
            
            
            
            The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide 
             accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one 
            should act on such information without appropriate professional advice after a thorough examination of the particular situation.  
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                           EXECTUIVE SUMMARY. 
                                     
                                1.  Definition of Start-up has been added whereby it has been defined as a company in existence for not more than 10 years since 
                                    the date of incorporation and having a turnover for any of the financial years since incorporation that is not greater than 500 
                                    million rupees. Furthermore, a new section has been added which has empowered the Commission to introduce measures to 
                                    facilitate such startups in the form ease of doing business, reduced compliance requirements etc. 
                                     
                                2.  The requirement of deposit of subscription money within 30 days has been removed and the Commission is empowered to 
                                    notify the prescribed manner in this regard. Furthermore, the requirement to report the receipt of subscription money has also 
                                    been removed. 
                                     
                                3.  The section relating to requirement of a company to have a common seal has been removed and similarly references to 
                                    common seal wherever appearing in the Act have also been deleted. Amendment has also been made in Section 62 (Shares 
                                    certificate to be evidence) owing to omission of requirement of common seal as mentioned, and now signature of authorized 
                                    officer of the company as may be specified will be enough evidence of the title of the person to such shares who sign a 
                                    physical certificate. 
                                     
                                4.  The requirement to enter father’s name and/or husband’s name (as the case maybe) in the Memorandum, Articles, and in the 
                                    return to be furnished by foreign companies under section 435, has been removed. 
                                     
                                5.  Consistent with Circular 11 of 2021 dated March 31, 2021, it has been clarified that private companies may issue shares for 
                                    consideration other than cash. 
                                     
                                6.  For further issue of capital under section 83, requirement of circular along with offer letter has been reinstated. 
                                     
                                                               Changes made in the Companies Act, 2017 through the Companies (Amendment) Act, 2021.                              1 
                                                                
                                7.  A new section, 83A, has been added which addresses Employees' Stock Options whereby a company may, under the 
                                    authority of special resolution, issue shares in accordance with its articles under employees' stock option the procedure of 
                                    which will be specified by the Commission. 
                                     
                                8.  Previously, only listed companies were allowed to buy back its own shares. This prohibition has now been removed and any 
                                    company, subject to its memorandum and articles may purchase its own shares and in case of shares purchased by an 
                                    unlisted public company or a private company such shares shall be cancelled and not be held as treasury shares. 
                                     
                                9.  The prescribed percentage for notice of resolution under section 140 has been reduced from 10% to 5%. 
                                     
                                10. Passing of resolution by the directors through circulation under section 179 now requires approval/signature by majority of 
                                    directors. Previously signatures of all directors was required. 
                                     
                                11. The directors’ report under section 227(2) in the case of a public company or a private company which is a subsidiary of a 
                                    public company shall now make disclosure with respect to remuneration package of each of the directors and chief executive 
                                    including but not limited to salary, benefits, bonuses, stock options, pension and other incentives. 
                                     
                                12. Listed companies, under business review, are now required to disclose the legitimate reasons for not declaring dividend under 
                                    section 240 despite earning profits and future prospects of dividend, if any. 
                                     
                                13. Imprisonment for violation of any provision of section 227 (i.e., Contents of directors’ report and statement of compliance) has 
                                    been done away with and replaced with punishment with a penalty of level 2 on the standard scale in respect of listed 
                                    companies and level 1 on the standard scale for others. 
                                     
                                14. Section 234, filing of unaudited financial statements, has been omitted. As such furnishing of unaudited financial statements by 
                                    private companies, not being a subsidiary of public companies, having the paid-up capital not exceeding 01 million rupees are 
                                    no longer required to file, with the Commission, unaudited financial statements. 
                                     
                                15. A new sub-section 435(4) has been added whereby the registrar shall maintain a register of foreign companies on paper or in 
                                    any electronic form under this Act in such form and manner as may be specified. 
                                                               Changes made in the Companies Act, 2017 through the Companies (Amendment) Act, 2021.                              2