Frequently Asked Question on Companies Ordinance, 2016

frequently-asked-question

Frequently Asked Question (FAQ)
Q. 1. Do directors of small companies also required to comply with the provisions of Section 153 (h) of the Companies Ordinance, 2016?
Ans. The Commission has granted general exemption in its Circular 35 of 2016 dated November 18, 2016 to promoters desirous of forming small sized companies and agriculture promotion companies for a period of two years.
Q. 2. After the promulgation of Companies Ordinance, 2016 on November 11, 2016,whether Companies Ordinance 2016 or Companies Ordinance 2016 is required to be complied in preparation of financial statements?
Ans. The Commission has already issued a clarification vide Circular 36 of 2016 dated November 22, 2106 that Companies having their financial year closure on or after December 31, 2016 are required to prepare the of financial statements in accordance with the provision of Companies Ordinance, 2016. Whereas the Companies whose financial year closes before December 31, 2016 are required to prepare the of financial statements in accordance with the provision of Companies Ordinance, 1984.
Q.3. Remittance of dividend directly into to bank of shareholders of a listed company as per Section 242 of the Companies Ordinance, 2016 is applicable for the companies having year end June 30, 2016?
Ans. Exemption has been granted to the listed companies for compliance for the said requirement till March 31, 2017 to make all arrangements as per Circular dated December 2, 2016. All listed companies shall be required to continue the current practice of payment of dividend till March 31, 2017 with effect from April 1, 2017 listed companies would be required to pay the dividend only through electronic mode only and in case a shareholder does not provide banking details his/her dividend would be withheld.
Q. 4 Are the requirements of Circular No. 19 of 2004 with reference to placement of quarterly accounts on its website still applicable to the Listed Companies?
Ans. Section 237(2) of Companies Ordinance, 2016 requires listed companies to place their quarterly accounts on the website and provide it is physical form if required by a member without payment of any fee.
Q. 5. Circulation of Circular No. 3 to be circulated to the shareholders and the concern registrar at the time offer of shares to the shareholders as previously required under Companies Ordinance, 1984 is still required under the Companies Ordinance, 2016?
Ans. The circular referred in previous Section 86(3) of the revealed Companies Ordinance 1984 has been renamed as “Letter of Offer” as given in Section 83 of the Companies Ordinance, 2016 and is applicable in view of the saving clause 509.
Q. 6 Does a foreign director not having NTN will not be eligible for appointment as a director of a company as per section 153(h) of C.O. 2016?
Ans. The Foreign Director which are not tax payer in Pakistan will not be required to comply with the requirement section 153(h). However, if a foreign director is a tax payer as per the Income Tax Ordinance 2002, he would already have been registered with the FBR and should have an NTN and therefore the provisions of Section 153(h) of the Ordinance will be applicable.
Q.7. Whether foreign company , as mentioned in Section 452 of the Companies Ordinance, 2016, includes companies incorporated under Companies Ordinance, 2016 and companies incorporated outside Pakistan and not having place of business or liaison office in Pakistan?
Ans. Beneficial ownership in any foreign company whether operating in Pakistan or outside Pakistan is required to be disclosed under Section 452 of the Companies Ordinance, 2016.
Q. 8. Whether the substantial shareholders of a locally (Pakistani) registered company is required to report his/her shareholding in the foreign company as per the requirement of section 452 of Companies Ordinance 2016?
Ans. The provision of Section 452 of the Companies Ordinance 2016 (Ordinance) is equally applicable on a substantial shareholders or officer regardless of being foreigner or Pakistani of a company incorporated under the Ordinance provided that he holds 10% or more shares in a foreign company or body corporate.
Q. 9. Do Regulator/Institutions required to file information under Section 452 of the Companies Ordinance, 2016?
Ans. Regulators/Institutions are not required to file information under section 452.
Q. 10. Whether shareholder or officer having no shares or having shares less than 10% are required to disclose information regarding beneficial ownership in foreign company?
Ans. Beneficial ownership in foreign company is required to be disclosed by every substantial shareholders holding 10% or more share in any company incorporated in Pakistan and all officer of the company. The substantial shareholders has been defined in section 2(1)(7) of Companies

Ordinance, 2016 while the officer includes any director, Chief Financial Officer, Company Secretary of other authorized officer of a company as defined in Section 2(1)(45) of Companies Ordinance, 2016. It is also clarified that Chief Executive Officer is also a director so the said provision is also applicable to the Chief Executive Officer.