ZAFAR & ASSOCIATES - LLP | Company Law Services - Pakistan

Asset Management Company

Asset Management

Asset Management Company Setup

A company that invests the pooled funds of retail investors in securities in line with the stated investment objectives.

Non-Banking Finance Company

Non-Banking Finance

NBFC Setup & Procedure

Non banking finance companies (NBFCs) are entities that provide similar like banking and financial services.

Pharmaceutical Company

Pharmaceutical Company

Pharmaceutical Company Setup

Pharmaceutical company, which is licensed to manufacture medicines for the healthcare.

Recruitment Company

Recruitment Company

OEP Establishment & Functions

Recruitment companies act as the go-between for employers and jobseekers to find suitable candidates.

Company Law Practice in Pakistan

Company Law Services

Company law is the legislation under which the formation or incorporation, registration, governance and dissolution of an entity is administered and controlled whereas company is a legal entity formed by a group of individuals for the purpose of operating a business or undertaking, which has a legal and corporate personality separate from that of its members.

Company law has been reformed with the objective of facilitating corporatisation by way of promotion and development of corporate sector, encouraging the use of technology by electronic means in conducting business and regulation thereof. Regulation of companies for protecting interests of shareholders, creditors, stakeholders and general public, inculcating the principles of corporate governance, safeguarding minority interests in companies, providing an alternate mechanism for expeditious resolution of company disputes, and matters arising out of or connected therewith.

ZA-LLP has a strong and broadly based international company law practice. We have a team of lawyers who specialise in companies incorporation and related work. The company law team has a particular focus on the way in which corporate services are brought to commercial market and promoted and has considerable expertise in the fields of company promotions and sponsorship.


The Corporate Law Authority (CLA) was regulatory authority of corporate sector in Pakistan. A restructuring plan was initiated under the Capital Market Development of Asian Development Bank in 1997. In December 1997, the Parliament of the country promulgated Securities & Exchange Commission of Pakistan (SECP) Act, 1997. In pursuance of this Act, SECP became operational with effect from January 1, 1999. SECP as an apex regulator of corporate sector and capital market, actively pursuing its mandate for developing a progressive corporate sector, decided to replace the Ordinance with new corporate laws that meet the demand of the present complex corporate structuring.

Eventually, the journey to frame a new company law was commenced from December 2015 when the first draft on Companies Bill was issued for stakeholders comments, and it was promulgated on November 11, 2016 as Companies Ordinance, 2016 and eventually the Companies Act, 2017 was promulgated on May 30, 2017.

A company may be formed by charter, by special Act of Parliament or by registration under the Company Act. The liability of members is usually (but not always) limited by the charter, Act of Parliament or memorandum of association. A company may be a public limited company, in which event its shares may be transferred freely among, and owned by, members of the public. All limited liability companies that are not public limited companies are private companies, denoted by the term (Pvt) Ltd. While companies are owned by their members (i.e. shareholders), they are managed by a board of directors. A company may be limited by shares, or by guarantee or an unlimited company.

Applicability & Scope of Work

Sec. 1 of The Companies Act, 2017

The Companies Act, 2017 extends to the territory of Pakistan as defined in the Constitution of Islamic Republic of Pakistan. Accordingly provinces of Punjab, Sindh, Khyber Pakhtunkhwa, Balochistan and Islamabad Capital Territory are part of Pakistan and the Act extends to these Provinces and territory.

Characteristic Features of Companies Act, 2017

The Companies Act, 2017 has replaced the 33 year old Companies Ordinance, 1984. The Act contains 515 (five hundred and fifteen) sections and 8 (eight) schedules. Many facets of the Act have been explained in the rules, which the Government of Pakistan has prescribed. The most significant legal reforms to bring the Company Law in Pakistan in accordance with current international standards are highlighted here.

Borrowing Powers

Sec. 30 of The Companies Act, 2017

The memorandum & articles of a company empower it to enter into any arrangement for obtaining loans, advances, finances or credit. Previously, the companies were not entitled to borrow money because their object clause did not contain any borrowing power.

Buy Back of Own Shares

Sec. 88 of The Companies Act, 2017

Now, all companies can buy back their own shares, previously, only listed Companies were allowed to buy back their shares. The shares purchased by an unlisted public company or a private company shall be canceled. Such cancellation of shares shall not be treated as a reduction in share capital u/Sec. 89. Such shares shall be canceled in such form and manner as may be specified. Listed Company shall buyback through securities exchange and tender mode of buyback is no more permissible.

General Meeting through Video Link

Sec. 132(2) of The Companies Act, 2017

At least seven days prior to the date of meeting, on the demand of members residing in a city who hold at least ten percent of the total paid up capital or such other percentage as may be specified, a listed company must provide the facility of video link to such members enabling them to participate in its annual general meeting. Previously, this facility wasn’t available to the shareholders.

National Tax Number (NTN) of Directors

Sec. 153(h) of The Companies Act, 2017

A person would not be eligible for appointment as a director of a company unless he holds National Tax Number (NTN) as per provisions of the Income Tax Ordinance, 2001. On 8 June 2017, Circular No. 15/2017 was issued by the Securities & Exchange Commission of Pakistan (SECP), providing for general exemption for two years to all Small Sized Companies (SCCs) inclusive of Agriculture Promotion Companies from the requirement of NTN. To qualify for a company to be an SCC, its paid-up capital must not be greater than PKR 10 million; its turnover not exceeding PKR 100 million; and its number of employee should not be more than 250.

Women (Female) Representation in Company

Sec. 154(d) of The Companies Act, 2017

In a major break-through for gender diversity in corporate boards in Pakistan, the Securities & Exchange Commission of Pakistan (SECP) has required listed companies to have at least one woman director. As per provision of Sec. 154(d), public interest companies shall be required to have female representation on their board as may be specified by the Commission. This change is being implemented through the revised Code of Corporate Governance under the new Companies Act 2017, which specifies that public interest companies shall have such representation of women directors as specified by the SECP. As a result, the proportion of women directors on listed companies, which are a subset of public interest companies, is expected to jump from 6.4 percent to at least 14.3 percent.

Corporate Social Responsibility (CSR)

Sec. 227(3)(c) of The Companies Act, 2017

Sec. 35 of The Code of Corporate Governance Regulations, 2019

Corporate Social Responsibility (CSR) is a concept that encourages companies to integrate social and environmental concerns in their business operations. The private sector of industry invests a lot in CSR these days, thanks to the high importance placed upon it by the customers. Through socio-economic perspective, CSR activities in Pakistan are pivotal to the turnaround that the country needs badly. The role of the corporate sector in alleviating the issues in Pakistan holds key importance. This is the prime reason why we have seen a recent surge in CSR activities in Pakistan.

Dispute Resolution through Mediation / Conciliation

Sec. 276 of The Companies Act, 2017

Under the Act, any company, its management or its members or its creditors may refer a dispute between them to the Mediation and Conciliation Panel set up by the SECP for resolution. It is new provision inserted in the Companies Law, albeit previously Arbitration Act, 1940 was applicable vide Sec. 283 of the Companies Ordinance, 1984.

Mergers & Acquisitions

Sec. 282 of The Companies Act, 2017

Previously, mergers between two or more companies, de-mergers and approvals of scheme of arrangements were to be approved by the High Court. The schemes take a long time for approval due to overwork in the High Courts. Under the Act, no formal approval is required from the High Court or the SECP for mergers between holding company and its wholly-owned company and companies owned by the same person. The merger of two companies can be effected after approval from the board only. For other mergers, it is the SECP not the High Court that is the sanctioning authority for all mergers, de-mergers and schemes of arrangements.

Inactive Companies

Sec. 424 of The Companies Act, 2017

Any company that is inactive / non-operational or that has no significant accounting transaction, may apply to the registrar to obtain the formal status of an inactive company.

Easy Exit for Defunct Company

Sec. 426 of The Companies Act, 2017

The Act provides an easy exit to a defunct company. On receiving application for dissolution from a defunct company, the registrar will dissolve that company by striking its name off the register of companies after 90 days of publication of notice in the Official Gazette, as per provisions of Section 426.

Shariah Compliant Companies & Securities

Sec. 451 of The Companies Act, 2017

No company will be entitled as a Shariah compliant company or security, listed or unlisted, unless it has been authenticated / declared Shariah compliant by the SECP pursuant to Section 451. The companies will not be allowed to appoint or engage any person for Shariah compliance, Shariah advisory or Shariah audit unless that person meets the fit and proper criteria laid down by Companies Act, 2017.

Global Register of Beneficial Ownership

Sec. 452 of The Companies Act, 2017

Every substantial shareholder or officer of a Pakistani company will have to report to his company any of his shareholding in a foreign company or body corporate. Subsequently, the company will have to report such information to the registrar along with annual return. The Securities & Exchange Commission of Pakistan (SECP) will keep record of the beneficial ownership of the shareholders and officers in the Companies’ Global Register of Beneficial Owners and will provide copies of the records to the Federal Board of Revenue (FBR) or any other agency pursuant to Sec. 452(8).

Prevention of Money Laundering

Sec. 453 of The Companies Act, 2017

The officials of all companies will be bound to check commission of fraud, money-laundering, including predicated offences, under the Anti-Money Laundering Act, 2010 pursuant to Section 453. The SECP will conduct joint investigation in serious cases like fraud, as per Section 258. The SECP may revoke the license of the companies registered with charitable and not-for-profit object, if found to be run and managed by persons involved in terrorist-financing or money-laundering in accordance with Section 42(5).

Real Estate Regulations

Sec. 457 of The Companies Act, 2017

All companies that launch any real estate projects and that invite advances from public for such projects will have to obtain approval and permission of the SECP at different stages of development of the projects, including: (a) before announcement of any real estate project; (b) before making any publication or advertisement of real estate projects; (c) before accepting any advances or deposits against any booking; (d) before inviting persons to purchase any land, apartment or building; and (e) before accepting a sum against purchase of the apartment, plot or building.

Quota for Persons with Disabilities

Sec. 459 of The Companies Act, 2017

It is mandatory for the large public interest companies to reserve 2% special quota for employment of disabled persons pursuant to Sec. 459. No parallel provision existed in the repealed Companies Ordinance, 1984.

Special Return to Rectify the Data

Sec. 465 of The Companies Act, 2017

All companies have to inform the SECP about any change of more than 25% in their shareholding, pursuant to Sec. 465.

Penalties

Sec. 478 - 479 of The Companies Act, 2017

The Act provides three slabs of penalties for each day of default of non-compliance or non-filing: PKR 500, PKR 1,000 and PKR 500,000 with the aggregate penalty in each case of default stated to be a maximum of PKR 25,000, PKR 500,000 and PKR 1,000,000 respectively as per provisions of Sec. 479.

Specialised Companies & Setup Procedure

Find more information and setup procedure, please click on any of the specialised company mentioned below:

Table: Specialised Companies

Our expertise in company law also gives our clients a significant advantage in more complex companies' transactions and de-mergers as, increasingly, there is a need for advice on strategic business contracts in the context of a corporate deal, for example to deal with transitional services issues or on-going supply arrangements. Specialist company law expertise combined with sectoral experience results in an in-depth understanding of the key business issues which need to be managed from a legal perspective which can be particularly helpful to private equity houses and investment banks.

The company law counseling group provides a complete range of company law services to ZA-LLPs' local, national and international clients. The group handles a variety of complex transactions, including mergers, asset acquisitions and sales, joint ventures, leasing transactions and financing, bankruptcy related transactions, and business startups, as well as the preparation of contracts of all types. In addition, because company law is often selected as the governing law for major national and international transactions, the Group works with both in-house and regular outside counsel in the structuring and documenting of such transactions and provides legal opinions required at closing.

Our Practice

We represent nationally and locally prominent commercial banks, finance companies, insurance companies and other lenders, as well as borrowers in connection with all aspects of secured and unsecured financing arrangements of all sizes. Those arrangements include:

  • Company Formation

  • Company Negligence

  • Choice of Entity

  • Company Dissolution or Liquidation

  • Tax Advice

  • Commercial Collections

  • Drafting Contracts

  • Insurance Subrogation

  • Buy-Sell Agreements

  • Partnership Disputes

  • Shareholder Agreements

  • Contract Disputes

  • Employment Contracts

  • Purchase of Commercial Real Estate

  • Commercial Financing

  • Collection Matters

Table: Company Law Practice

Our focus on strategic issues and our familiarity with various industries allows us to assist our clients in negotiating terms that protect them throughout the lending relationship.


Our Core Competencies

1

Collaborative Skillset

Collaborative lawyers trust the wisdom of the group; lone wolves and isolationists do not do any good anymore.

2

Emotional Intelligence

Distant, detached lawyers are relics of the 20th century, the market no longer wants a lawyer who is only half a person.

3

Technological Affinity

If you can not effectively and efficiently use e-communications, and mobile tech, you might as well just stay home.

4

Time Management

Virtually a substantial part of lawyers difficulties in this regard lie with their inability to prioritise their time.


What People Say About Us

  • Thank you for your email and the final draft. Indeed it is one of the finest drafts I have come across with. Certainly, your commitment level, eagerness to resolve, intellectual strength, attention to detail and legal expertise are commendable. Under your admirable guidance and direction, I have been able to maneuver with immense success and will reach fruition much earlier than anticipated. Thank you for being so supportive!

    Yaser Shan ~ Toronto, Canada
  • Thank you again so much for this wonderful service. I just wanted you both to know, I spent weeks searching for a service in Pakistan like this, that could legally handle payroll for a Pakistani employee for a US based business and so far I am extremely happy with your organization's service and punctuality. Your service thus far is absolutely amazing and I know Sunita is grateful that we were able to find your organization to ensure her position at our company.

    Prince E. Rich IV | CEO ~ Rich Technology Group LLC, USA
  • We are very happy with the work you have done. Its highly appreciated the professionalism and deep research by the team. Accept our deep gratitude! I do not know how to say Thank you to you and your team! It's a masterpiece you have created and we are very thankful for your help to assist in our social cause.

    Imtiaz Makhani ~ Karachi, Pakistan
  • Thank you very much for your fantastic support, which has been absolutely invaluable throughout the process. We really enjoyed working with you and look forward to plenty more opportunities for shared projects into the future.

    Dr. Albrecht Muser | KPMG ~ München, Germany
  • Working with all of you over the last years has been a pleasure and an honour! Your expertise, focus on customer service and professionalism make it possible for us to provide superior services to our clients and I am so grateful to you.

    Maude Burger-Smith ~ Cape Town, South Africa
  • We are glad to inform you the receipt of current outstanding balance in our bank account from the disputed party. Therefore we request you to arrange to close the dispute case with them as per our management decision. We would like to take this opportunity to thank you for all the support and advice to solve this matter. It was pleasure working with you all.

    Rahul Meppad ~ Dubai, UAE
  • Thank you for your support in this process and for your great hospitality. Your assistance has been of great importance. It was also important to see and experience the high quality of your services and your well known firm.

    Magnus Greko ~ Sweden
  • Thank you for your support in this process. Your assistance has been invaluable. We are looking forward to a long lasting working relationship with you. Also, thank you for hospitality during these past days.

    Lothar Geilen ~ Germany
  • Dear Atty. Iram Fatima: I would like to let you know that my wife came in USA last week. The U.S. Embassy Islamabad approved her visa petition in the lights of all the wonderful endeavors done by you and Mr. Birach. It was a long legal battle of about 7 years. I must say that your law firm is one of the best in the country and you are a highly professional advocate. Dr. Zafar should feel proud to have you in his crew. Finally, again I would say Thanks for all your legal services and I am your best reference.

    Zubair Mufti ~ Texas, USA
  • Dear Dr Zafar and Iram: Thank you very much for timely submission of the excellent opinion letter. It is very well drafted and covers the key points. We very much appreciate your excellent and timely work in preparing the legal opinion.

    Mrs. Iqbal Farrukh ~ San Francisco, USA
  • Dear Attorney Iram Fatima: Thanks so much for all of your kind efforts in this area and I must admit that your legal firm is the best in the country.

    Zubair Mufti ~ Texas, USA
  • The efficiency and effectiveness of your services are much appreciated.

    James Alexander Linton Williams ~ UK
  • We are complately satisfied with the e-communication and provided services. We would like to thank the whole team, and Ms Iram Fatima in particular, for your professionalism and the Due Diligence you carried out.

    Elena Pavlova ~ France
  • Many thanks for this, and thank you for being so prompt. It is very appreciated.

    Alex Gilchrist ~ Somerset, UK
  • Thank you again for handling my case so well, I am honoured to be represented by you.

    Yolanda Slabbert ~ Port Elizabeth, South Africa
  • Thank you very much for your great attention to my case, I see that you're a very serious company and I'm happy that I've choose you.

    Sergio Lujan ~ Bogota, Colombia
  • I really appreciate the help and support provided by Zafar and Associates to our company. I don’t know what to say or how to thank you, but to tell the truth your services are really the best legal services we have ever received. You are truly a professional and effective law firm.

    Adnan Branbo ~ Dubai, UAE
  • Thank you very much for your contribution. We will review the information and incorporate it into the International Citation Manual of Washington University Global Studies Law Review. Your help is appreciated.

    Naomi Levin ~ Washington, USA
  • I wanted to let you know that i got the documents. And i wanted to thank you and the whole team who worked on my case. You all did a good job thanks again.

    Naima Ashraf ~ The Hague, Holland
  • Thank you very much for all the work you have done to ensure that the Death in Service benefit reaches the parents of the deceased. Are they expecting this money and do they understand where it is coming from? We appreciate your assistance and excellent work.

    Susan Bauer ~ London, UK
  • I have no words to express my gratitude to you. People like you are very rare and I have the privilege to know one of those. May God shower all blessings on to you and your family. I am a small man with only prayers on my lips.

    Dr. Haridev Bhargava ~ Saratoga, USA
  • I must say your handling of this matter has been totally sterling and I shall not have any hesitation in recommending you and your firm to others.

    Rosina Ahmad ~ UK
  • Good morning, I received the documents back yesterday afternoon. Thank you so much for your quick response to the job. We really appreciate it. Looking forward to working with you in the further.

    Mrs. Jan Malcolm ~ Auckland, New Zealand
  • Thank you very much for the case. It is just brilliant! I am so grateful that you went out of your way to help me.”

    Loraine Bhan ~ Suva, Fiji
  • I do appreciate highly the sense of commitment your office wishes to dedicate to the follow up of our question for information. I have transmitted the contents of your email IMMEDIATELY to the contact, together with confirmation of the highest esteem we attribute to the quality of the services rendered by ZAFAR & ASSOCIATES.

    Paul Wouters ~ Istanbul, Turkey
  • Thank you very much for the information and good news. I know you’ve been working too hard and I appreciate every single minute working with you all. It’s an experience to be in the team of hardworking people and I am very proud to be included.

    Evangeline Williams ~ Paphos, Cyprus
  • I would like to thank you for your swift and excellent service that your office recently provided us. I would definitely forward your contact information to my friends and family in reference to seeking legal matters in Pakistan. I would also inform Sean Hogan and his associates to pass on your contact information to any clients that may need assistance in the matters of law in Pakistan.

    Zarar Khan ~ Miami, USA
  • We are greatly impressed with your firm and the professional calibre of the partners. If acceptable, we would like to keep your firm as a reference for future projects. Please let me know.

    Tanaz Pardiwala ~ Barcelona, Spain
  • We are happy to inform you that we have received the original succession certificate via DHL. I want to take this opportunity to thank you for your efforts, especially Dr. Zafar, who was kind enough to handle the security deposit at the court. With our best wishes and success for the New Year, to you and your esteemed team, we remain with.

    Mansur Asrar ~ Istanbul, Turkey
  • I am writing to convey to you how much I appreciate your prompt service! My mother called me today and informed me that 2 lawyers from your firm visited her. It is a pleasant surprise to know that such a law firm exists in our very own country. I would definitely recommend your firm to any friend who is in need of professional legal services in Pakistan.

    Naveed Ahmad ~ USA
  • I am truly very impressed with the follow up of your law firm. I never thought a Pakistani firm would be so aggressive and pro-active. Do you even happen to come to NYC? If so, then please look me up here when you visit next.

    Faisal Mumtaz ~ New York, USA
  • I want to thank you for all services you have rendered to us. I really appreciate it and hope on further cooperation.

    Petrov Andrey ~ Moscow, Russia
  • With God's help you have done a great thing for our family. Thank you so much for your diligence and expertise. We are truly grateful to God for all that is possible now. We also are looking forward to meeting you and your staff when we arrive in Pakistan next month. Please let us know if there is anything we can bring for you from the United States as a gift.

    Shaukat Minhas and Colleen Davidson ~ Dallas, USA
  • Your help in investigation case is well appreciated. My brother and I are ever grateful to you for obtaining the document. Thank you and god bless you and your practice team.

    Kevin Lessani - Dallas - USA
  • I greatly appreciate that your law firm is very careful in its preparation of petitions. In fact, the outcome of a legal fight greatly depends on how effectively a law firm has presented its case. If it fails to conceive in advance as to what it will have to face in defense, it can not prepare an effective petition. I admire that ZAFAR & ASSOCIATES - LLP are very careful in their initial step i.e. to prepare petition, around which the whole legal battle is fought.

    M. Iftikhar Sheikh ~ Dhahran, Kingdom of Saudi Arabia