Companies Act 2017 in Pakistan – Complete Guide
The Companies Act 2017 is the primary legal framework that governs company formation, management, compliance, and dissolution in Pakistan.
Whether you’re planning to register a new business or need help staying compliant with SECP regulations, understanding this Act is crucial.
And if you need expert assistance with SECP company registration, tax compliance, or legal documentation, Waystax is here to guide you every step of the way.
What Is the Companies Act 2017?
The Companies Act, 2017 replaced the old Companies Ordinance, 1984, bringing Pakistan’s corporate laws up to modern international standards.
It aims to strengthen corporate governance, increase transparency, and simplify company registration.
If you are setting up a new company in Pakistan, it’s the core law you must follow. At Waystax, we ensure full compliance without the stress.
Objectives of the Companies Act 2017 – Why SECP Introduced This Law
The Companies Act 2017 was introduced to modernize Pakistan’s entire corporate framework and replace the outdated 1984 Ordinance.
SECP implemented this law with a clear vision: to create a business environment that is transparent, technology-driven, and supportive of sustainable growth.
Here’s what the Act aims to achieve:
1. Promote Corporatization and Strengthen the Corporate Sector
The new law encourages businesses, especially startups and SMEs, to adopt formal corporate structures. Encourages startups and SMEs to adopt formal structures via Pvt Ltd or SMC Pvt Ltd registration. This boosts credibility, ensures better management practices, and helps companies scale quickly.
2. Enable Digital and Technology-Based Business Processes
A major objective of the act is to shift corporate compliance towards digital filing, online submissions, and electronic communication. This reduces manual paperwork and speeds up SECP processes.
3. Protect Shareholders, Creditors & All Stakeholders
The act strengthens legal safeguards for shareholders, especially minority shareholders, while ensuring creditors and the general public are protected. Ensures compliance with SECP rules and proper filings of Form 45 / UBO. These regulatory protections build trust and transparency in the business ecosystem.
4. Improve Corporate Governance Standards
By requiring companies to adopt responsible management practices, the law promotes accountability, transparency, and ethical decision-making.
5. Provide Faster & Fairer Mechanisms for Dispute Resolution
The Act introduces alternative methods such as mediation and arbitration, encouraging quick resolution of company-related conflicts. This reduces the burden on courts and helps businesses resolve disputes more efficiently.
What the Act Covers
The Companies Act 2017 spans the entire lifecycle of a company, including:
- Company formation and incorporation.
- Structure, management, and governance.
- Financial reporting and auditing.
- Rights and responsibilities of directors and shareholders.
- Corporate transactions, restructuring, and winding up.
- Mechanisms for dispute resolution through mediation, arbitration, and courts.
The Act has overriding authority on all matters related to corporate entities in Pakistan, making it essential for every business to follow.
A Complete Breakdown of All 13 Parts of the Companies Act 2017
Below is a structured map of the Act’s 13 distinct parts.
1. Legal Foundations & Governance Structure
These parts establish the ground rules, the definitions, and the regulatory authorities that oversee companies.
- Part I: Preliminary: Sets the scope, title, and the “Dictionary” of the Act. It confirms that this Act overrides other conflicting regulations.
- Part II: The Judiciary: Outlines the role of the High Courts, the formation of specialized company benches, and the procedure for legal appeals.
- Part III: SECP Oversight: Defines the vast powers of the Securities and Exchange Commission of Pakistan (SECP) to regulate, monitor, and issue directives.
2. Birth & Identity of a Company
This section covers how a company comes into existence and how it presents itself to the world.
- Part IV: Incorporation: Covers the mandatory registration of business entities.
- Governs the Memorandum and Articles of Association, the company’s constitution.
- Rules on naming a company, changing its status (e.g., from private to public), and setting up the registered office.
3. Financial Architecture: Capital & Funding
These parts deal with how companies raise money and secure their assets.
- Part V: Securities & Shares: Details on how to issue shares, the role of a prospectus, share certificates, and the rights of different classes of shareholders. It also covers the issuance of debentures and “Shariah-compliant” capital.
- Part VI: Mortgages & Charges: A crucial compliance section requiring companies to register any security interests (loans/collateral) with the registrar to protect creditors.
4. Operational Leadership & Administration
This is the “engine room” of the Act, focusing on how companies are managed day-to-day.
- Part VII: Management & Administration: Meetings: Rules for AGMs (Annual) and EGMs (Extraordinary).
- Directors: Election, removal, legal duties, and remuneration.
- The CEO: Appointment and specific responsibilities.
- Financial Records: Requirements for auditing, bookkeeping, and the distribution of dividends.
- Investigations: Powers of the SECP to inspect documents and investigate fraud.
5. Mergers, Disputes & Resolution
These parts handle internal conflicts and corporate restructuring.
- Part VIII: Arbitration & Mediation: Provides frameworks for settling disputes outside of full court trials and governs the process of company mergers/reconstructions.
- Part IX: Anti-Oppression: Protects minority shareholders from mismanagement or unfair treatment by the majority.
6. Winding Up: Closing the Business
This section provides the legal “death certificate” process for companies.
- Part X: Winding Up: Covers the various ways a company ends, including:
- By Court: Forced closure due to insolvency or legal breaches.
- Voluntary: Shareholders or creditors choosing to close the business.
- Part XI: Unregistered Entities: Procedures for winding up associations that were never formally registered.
7. Global & Special Provisions
Addressing international entities and specialized modern regulations.
- Part XII: Foreign Companies: Rules for international businesses operating within Pakistan, including their accounting and disclosure requirements.
- Part XIII: Miscellaneous & Compliance: Real Estate & Agriculture: Specific rules for these sectors.
- Digital Filing: Framework for electronic submissions.
- Enforcement: Penalties for fraud, money laundering, and non-compliance.
- Schedules: The actual forms, tables, and fee structures used for filing.
Forms and Schedules under the Companies Act, 2017
The Companies Act 2017, is the primary legislation, but its practical implementation is managed through mandatory Forms and highly detailed Schedules.
These components ensure administrative compliance, standardized reporting, and structured internal governance for all corporate entities in Pakistan.
| Schedule | Contents/Description |
| First Schedule | – Management regulations for companies limited by shares- Rules for single-member private companies– Standard MOA & AOA formats for:• Companies limited by shares• Companies limited by guarantee (with/without share capital)• Unlimited companies with share capital |
| Second Schedule | Format of the Statement in Place of Prospectus for companies that do not issue a prospectus while raising capital |
| Third Schedule | Classification & accounting framework for:• Public Interest Companies• Large-sized companies• Medium-sized companies• Small-sized companies |
| Fourth Schedule | Financial statement disclosure requirements for listed companies and their subsidiaries, including:• General disclosure rules• Statement of financial position format• Profit & loss statement format |
| Fifth Schedule | Financial statement disclosure requirements for non-listed companies, including:• General requirements• Statement of financial position format• Profit & loss account format |
| Sixth Schedule | Penalties and punishments for serious corporate fraud |
| Seventh Schedule | Complete fee structure payable to the Registrar and SECP for registrations, filings, certifications, etc. |
| Eighth Schedule | Rules for direct complaints to courts by:• SECP• Registrar• Company member• Creditor applicable for certain offenses requiring immediate legal action |
Rules Under the Companies Act, 2017
The Companies Act, 2017 empowers the Federal Government to issue rules that explain how different parts of the law should be implemented. Many rules from the old 1984 Ordinance also continue to apply unless replaced.
These rules provide detailed procedures for company operations, compliance, and governance.
Current rule-based areas include:
- Asset-backed securitization
- Audit of cost accounts
- Buyback of shares
- Companies’ court procedures
- Governance of public sector companies
- Employee stock option schemes
- Investment of employees’ provident funds
- Acceptance of deposits
- Issuance of capital
- Management by an administrator
- Rehabilitation of sick industrial units
- Variation in shareholders’ rights
Regulations Under the Companies Act, 2017
SECP also has the authority to issue regulations, which provide more technical and operational guidelines for companies.
These regulations cover incorporation, disclosures, capital issuance, governance, and record-keeping.
Key regulatory areas include:
- Asset-backed securitization
- Auditor reporting obligations
- Share buybacks
- Non-profit and charitable company regulations
- Code of corporate governance
- Collateral management companies
- Dividend distribution
- Foreign company regulations
- Further issue of capital
- Standard forms and filing requirements
- Group company registration
- Incorporation procedures
- Investment in associated companies
- Issuance of convertible debt and commercial papers
- Audit of cost accounts
- Selection of independent directors
- Mediation and conciliation
- Postal balloting
- Private Sukuk placements
- Appointment of liquidators
- Registration of intermediaries
- Related party transactions
- Shariah governance framework
- Unclaimed shares and dividends
Why Choose Waystax?
Navigating the Companies Act, 2017 and SECP compliance can be complex. Waystax simplifies the process with expert guidance and end-to-end support:
- Complete SECP Services: Company registration, filings, director updates, and regulatory compliance.
- Updated Expertise: Always aligned with the latest Companies Act updates, rules, and regulations.
- Hassle-Free Process: Professional preparation and submission of all forms, reducing errors and delays.
- Digital & Fast: Efficient online filing and document management.
- Ongoing Support: From incorporation to audits, tax, and corporate changes, we keep your business compliant.
Want to know what more Waystax can offer?
Discover tailored services and insights to navigate the Companies Act 2017 with ease today
FAQs – Companies Act, 2017
Mastering Corporate Compliance with the Companies Act 2017
The Companies Act 2017 is the cornerstone of corporate governance in Pakistan, covering every aspect of a company’s lifecycle. Its modern framework promotes transparency, protects stakeholders, and encourages digital, technology-driven processes.
Navigating this complex legislation can be challenging, but with expert guidance from Waystax, businesses can ensure full compliance.
Whether you are registering a new company, managing corporate filings, or handling governance matters. Waystax provides reliable, efficient, and end-to-end support to help your business thrive confidently in Pakistan’s corporate environment.
Want personalized guidance for your business?
Get expert solutions to simplify your business compliance and growth.
