A not-for-profit association (more commonly called an NGO or NPO) may be registered as company under the provisions of the Companies Ordinance, 1984 (the ‘Ordinance’). In general terms, a not-for-profit association (company) applies its profits or income in promoting its charitable/ useful objects and prohibits the payment of any profits, income, dividend or proceeds to its members. Before its registration as a company with the Securities and Exchange Commission of Pakistan (the ‘Commission’), any such association is required to obtain license under Section 42 Companies of the Ordinance read with rule 6 of the Companies (General Provisions and Forms) Rules, 1985 (the ‘Rules’) and the relevant Circulars issued from time to time.
The Commission issues license for a period of five (5) years, renewable for further term (s) of five (5) years each. The procedure for obtaining license, subsequent registration of such association as company limited by guarantee, and thereafter renewal of the license when due, is provided in this guide. This document is aimed at providing guidance and should at all times be read in light of the prevailing law. In case of any conflict between the law and this document, the law shall prevail. It will also be helpful in countering the fraudulent activities committed through fake identity of individuals who are at the helm of affairs to run a company.
This verification will be made on all new registrations of companies and Section 42 Companies. This is a web-based real-time activity displaying the front and rear image of the CNIC for verification of the genuineness of the applicants. The measure is aimed to ensure authenticity of the information of the promoters/directors filed during the incorporation of companies through the statutory returns with the offices of the registrars. The Securities and Exchange Commission of Pakistan (SECP) has begun verification of the credentials of directors of companies through online CNIC (Computerized National Identity Card) Verification Service (VERISYS) of National Database and Registration Authority (NADRA).
It will further bring in transparency and ensure validation of information, besides eliminating instances of fraud and forgery. Not the least, it will be helpful in supporting the anti-terrorism efforts of the government by ensuring validity of identity information. The verification service will also be extended for validating information of sponsors of companies in the non-profit sector while applying to the Commission for license as an association not for profit under Section 42 Companies Ordinance, 1984. However, the federal government still exercises its authority in matters relating to federal taxes, security and foreign funding.
A majority of the NPOs are registered under the Societies Registration Act 1860, followed by the Trust Act 1882, the Social Welfare (Agencies and Control), Ordinance, 1961, and Section 42 Companies Act 2017. In terms of requirements that NPOs are expected to comply with, disparities exist at three levels: between and amongst NPO registration laws, between NPO registration laws and tax laws, and between administrative regulations issued by the government and ground realities of the NPO sector. A preliminary examination of comparative annual reporting requirements under different NPO registration laws reveal striking contrasts between them.
After the 18th amendment, registration, regulation and legislation regarding the subject matter now falls under the domain of the respective provincial governments with the exception of Section 42 Companies. Proposed regulations require development of comprehensive policies, internal controls, performance appraisals, maintenance of several registers, along with several administrative permissions from the SECP. The newly proposed ‘Associations with Charitable and Not for Profit Objects (Licensing and Corporate Governance) Regulations 2017’ are poised to further increase the compliance requirements for Section 42 Companies.
The Commission issues license for a period of five (5) years, renewable for further term (s) of five (5) years each. The procedure for obtaining license, subsequent registration of such association as company limited by guarantee, and thereafter renewal of the license when due, is provided in this guide. This document is aimed at providing guidance and should at all times be read in light of the prevailing law. In case of any conflict between the law and this document, the law shall prevail. It will also be helpful in countering the fraudulent activities committed through fake identity of individuals who are at the helm of affairs to run a company.
This verification will be made on all new registrations of companies and Section 42 Companies. This is a web-based real-time activity displaying the front and rear image of the CNIC for verification of the genuineness of the applicants. The measure is aimed to ensure authenticity of the information of the promoters/directors filed during the incorporation of companies through the statutory returns with the offices of the registrars. The Securities and Exchange Commission of Pakistan (SECP) has begun verification of the credentials of directors of companies through online CNIC (Computerized National Identity Card) Verification Service (VERISYS) of National Database and Registration Authority (NADRA).
It will further bring in transparency and ensure validation of information, besides eliminating instances of fraud and forgery. Not the least, it will be helpful in supporting the anti-terrorism efforts of the government by ensuring validity of identity information. The verification service will also be extended for validating information of sponsors of companies in the non-profit sector while applying to the Commission for license as an association not for profit under Section 42 Companies Ordinance, 1984. However, the federal government still exercises its authority in matters relating to federal taxes, security and foreign funding.
A majority of the NPOs are registered under the Societies Registration Act 1860, followed by the Trust Act 1882, the Social Welfare (Agencies and Control), Ordinance, 1961, and Section 42 Companies Act 2017. In terms of requirements that NPOs are expected to comply with, disparities exist at three levels: between and amongst NPO registration laws, between NPO registration laws and tax laws, and between administrative regulations issued by the government and ground realities of the NPO sector. A preliminary examination of comparative annual reporting requirements under different NPO registration laws reveal striking contrasts between them.
After the 18th amendment, registration, regulation and legislation regarding the subject matter now falls under the domain of the respective provincial governments with the exception of Section 42 Companies. Proposed regulations require development of comprehensive policies, internal controls, performance appraisals, maintenance of several registers, along with several administrative permissions from the SECP. The newly proposed ‘Associations with Charitable and Not for Profit Objects (Licensing and Corporate Governance) Regulations 2017’ are poised to further increase the compliance requirements for Section 42 Companies.
No comments:
Post a Comment