BUSINESS LAW

ASSIGNMENT
TITLE: INCORPORATION AND MANAGEMENT
UNDER COMPANIES ACT 2017
PRESENTED BY:
Momina Shakeel
Hijaab Fatima
Alishba Qureshi
Ayesha Mazhar
Nadia Kousar

TABLE OF CONTENT
1. INCORPORATION………………
Introduction
Why do Companies Incorporate?
Key Aspects
Advantages
2. INCORPORATION PROCESS…………..
How to incorporate?
Incorporation process under companies act 2017
o Name Reservation
 o Preparation of Documents (MOA,AOA)
o Filing with Registrar
o Certificate of Incorporation.
o Commencement of Business.
o Special Licenses.

3. ANALYZING THE TYPES OF COMPANIES

o Private limited company
o Public limited company
o Single member company.
o Foreign company
o Shariah complaint company
o Subsidiary company

4. GOVERNANCE STRUCTURE
Introduction
The Board of Directors
Composition and Appointment
Duties and Responsibilities
Shareholders
Shareholder’s rights and General meetings
Audit and Financial transparency
Appointment of Auditors
Duties of Auditors.
Corporate Officers and Management
CEO and company Secretary
CFO
Regulatory Oversight and Compliance
Role of SECP.
Compliance Requirement

1. INCORPORATION
Incorporation is the process of constituting a company, entity, or other organization as
a legal corporation1.
INTRODUCTION
The Companies Act, 2017 is a modern legal framework that governs company
incorporation, management, and compliance in Pakistan. Replacing the 1984
Ordinance, it promotes transparency, investor protection, and corporate accountability
while aligning with international standards. This assignment explores different types
of companies under the Act, their key features, formation procedures, and compliance
obligations.
“Incorporation” is the broad term to describe a business registered with a state to
become a separate legal entity. That business entity is often owned by shareholders

1
Investopedia.
(even if it is a corporation with a single owner) that may also be overseen by a board
of directors.2
WHY DO COMPANIES INCORPORATE…?
Being a regulated entity, a Company enjoys a professional image and credibility in the
eyes of its customers, suppliers, creditors and other stakeholders3
ADVANTAGES OF INCORPORATION……
Incorporation effectively creates a protective bubble of limited liability, often called
a corporate veil, around a company’s shareholders and directors. As such,
incorporated businesses can take the risks that make growth possible without
exposing the shareholders, owners, and directors to personal financial liability
outside of their original investments in the company.
Because an incorporated business can issue and trade shares, this allows for easy
transfer of ownership to another party. Whereas a sole proprietorship must sell the
entire company to financially profit from disposing of company equity, owners of a
company can still retain primary ownership but sell part of their shares for personal
profit. In addition, shares traded on public exchanges are much more liquid markets
compared to other means of selling a business.
An incorporated business may achieve a lower tax rate than on personal income.
Incorporated businesses often receive more lenient tax restrictions on loss
carryforwards and may receive more favorable tax treatment for allowable
deductions.4

KEY ASPECTS…………
 Incorporation is the way that a business entity known as a corporation is
formally organized and officially brought into existence.
 The incorporation process involves writing up a document known as the
articles of incorporation and enumerating the firm’s shareholders.
 In a corporation, the assets and cash flows of the business entity are kept
separate from those of the owners and investors, which is called limited
liability.
 Through incorporation, a company’s tax liability is also treated differently
from that of a sole proprietorship or partnership.
 Incorporating makes it easier for a business to sell shares, raise capital, and
divest ownership from a portion of the business 5.

2. INCORPORATION PROCESS….
HOW TO INCORPORATE?
There are many steps to incorporating a business, each with its own degree of
importance. Below are the following decisions and actions a business owner must
take to incorporate.
INCORPORATION PROCESS UNDER COMPANIES ACT 2017
1. Name Reservation(Section 10)

2
Investopedia.
3
Invest.gov.pk
4
Investopedia.
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Investopedia.
First step towards incorporation of a company is to submit a combined or a separate
application for the reservation of Company's name and incorporation either through
e-services or in physical form as per the formats provided in the Companies
(Incorporation) Regulations 2017 the Regulations
The combined application shall include three proposed names in the order of priority,
out of which any one may be approved by the registrar
It is neither identical or resemble or similar to the name of any existing company,
It is not inappropriate or deceptive.
It is not undesirable i.e., it includes the name of a registered trademark or a trade
mark, includes any word or words which are offensive to any section of the people; it
is identical with or resemble or similar to name of registered LLP or any other word
that in the opinion of registrar is undesirable:
It is not designed to exploit religious susceptibilities of people;
It does not contain any prohibited word.6

Preparation of Documents( Section 14-17)

2.
Two main documents are required for the company registration. They are:
 Articles of Association (AOA)
 Memorandum of Association (MOA)
The company should file the business registration application at the Registrar of
Companies (ROC) along with the company incorporation form, MOA and AOA.
As we’ve mentioned earlier, the Articles of Association and Memorandum of
Association define your company’s key features, its rules and regulations and internal
management. The MOA and AOA are two fundamental documents of the company.
These documents are indispensable, and your organization’s establishment remains
upon them. So, the directors of an organization or the company owner must draft
these two documents with utmost clarity and precision. If there is any mistake, you
won’t be able to get your business registered.
Memorandum of Association
A Memorandum of Association (MOA) is a document that contains all the details of
the company’s incorporation, and it is the main document that clearly projects its
structure. This MOA is also known as the charter of a company. This lays down the
scope of the company’s activities and the objectives for which you are starting this
company and determines the scope of its authority and its relationship with the
outside world.
This is the first document to be submitted for your company’s registration.
Contents of MOA
Every company’s MOA should contain the following five clauses:
 Name clause: The Company will have a name of its own to project its identity.
The public company’s name will end with the word public limited, and in the
case of a private company, the name of the company name will end with the
word Private Limited.
 Registered office clause: According to Section 12 of the Indian Companies
Act, within 15 days of the company’s incorporation, the company must have a
registered office to which all communications and notices may be sent.

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SECP
 Object clause: The Memorandum of Association should determine the item for
which the organization is proposed to be joined and any matter considered
essential in the promotion thereof.
 Liability clause: The liability of an organization, whether restricted or
limitless, should be determined in the Memorandum of Association under the
Liability clause.
 Capital clause: This clause will state the capital amount with which the
company is registered.
 Subscription clause: The subscribers to the Memorandum of the company
have to take at least one share of the company

Articles of Association
The second most important document required for your company registration
is the Articles of Association (AOA). This is the document that farms rules,
regulations and guidelines that control or administer the business. The AOA is
subordinate to the MOA of an organization. Each organization should have an
AOA as it assumes a fundamental part in characterizing its inner functions and
obligations. The contents of the AOA should be in sync with the MOA and the
Companies Act, 2013. Thus, you also require AOA to get your business
registered.
Contents of AOA
 Adoption of preliminary contracts.
 Share capital, variation of rights, number and value of shares it holds.
 Issue of preference shares.
 Allotment of shares.
 Calls on shares.
 Lien on shares.
 Transfer and transmission of shares.
 Forfeiture of shares.
 Alteration of capital.
 Buyback.
 Share certificates.
 Conversion of shares into stock.
 Voting rights and proxies.
3. Filing with registrar (Section16)
All the documents must be registered by the registrar office
The documents can be registered digitally via SECP Portal or physically
SECP verifies compliance of the documents and ensures the lawful objectives.
4. Certificate of Incorporation
After the registration of the memorandum of association and articles of
association and paying the prescribed fee of registration the registrar issues a
certificate which confirms the incorporation of a company.
From the date mentioned in the certificate issued by registrar a companies become
body corporate by the name that is specified in the memorandum.
Now the company acquires all the legal effects including the ability to sue, acquire
property and carry out its objective
 5. Commencement of Business (Section19)
Commencement of a company depends on its type-private or public-

Private Companies
Under the companies act 2017, there is no as such requirement for a private
company to obtain a certificate of commencement. A private company can
therefore commence business immediately after incorporation.
Public Companies
A public company must fulfill some conditions before commencing a business
 Shares have been allotted to the minimum subscription amount.
 each director has paid for the shares agreed to be taken.
 a declaration is filed with the Securities and Exchange Commission
of Pakistan by a director or CEO stating that the above conditions have
been compiled with.
 where the company has issued a prospectus, a copy of it has been filed
with SECP.
6. Special Licenses (for Section 42 Companies)
Certain types of companies require a special license from the Securities and Exchange Commission of
Pakistan (SECP) before they can be incorporated.
Under the companies act 2017 and companies regulations, a Not-for-profit association
applies for its profits or income in promoting its objects only and prohibits the
payment of any profits, income, dividends or proceeds to its members. Any such
association is required to obtain a license under section 42 of the act according to
regulation 4 and 5 of the companies regulations.
 Not for Profit Companies
 Insurance Companies
 Modaraba Companies etc.
Analyzing the Companies under the Companies Act 2017
(Pakistan)
Introduction
The Companies Act, 2017 is a modern legal framework that governs company
incorporation, management, and compliance in Pakistan. Replacing the 1984
Ordinance, it promotes transparency, investor protection, and corporate accountability
while aligning with international standards. This assignment explores different types
of companies under the Act, their key features, formation procedures, and compliance
obligations.
Types of Companies under the Act
The Act classifies companies based on liability, membership, ownership, and purpose.
Choosing the right type is crucial, as it affects legal compliance, structure, and
operations. Common types include:
 Private Limited Company
 Public Limited Company
 Single Member Company
 Foreign Company
 Shariah complaint company
 Subsidiary company
These classifications define the company’s legal identity and determine its obligations
under the Companies Act 2017, SECP Act 1997, and Income Tax Ordinance 2001.
Source: https://lex.com.pk/blogs/types-of-companies/

Private Limited Company

A Private Limited Company (Pvt. Ltd.) is a popular business structure in Pakistan,
especially for small and medium enterprises. It does not offer shares to the public, and
ownership remains within a limited group.
It is governed under the Companies Act, 2017, and provides key benefits like limited
liability, legal separation from owners, and tax advantages.
Key Features:
 Members: Minimum 2 and maximum 50 shareholders.
 Liability: Limited to the amount of share capital contributed.
 Capital: Minimum capital required is PKR 100,000.
 Privacy: Financial records are not made public.
 Continuity: The company continues to exist regardless of changes in ownership.
Advantages:
 Protects personal assets from business liabilities.
 Separate legal identity.
 Fewer chances of hostile takeovers.
 Better credibility than sole proprietorships.
This structure is ideal for businesses seeking growth, protection, and flexibility
without going public.
Source: Difference between Sole Proprietorship and Private Limited Company in
Pakistan

Public Limited Company

A Public Limited Company (PLC) is a business structure that allows its shares to be
sold to the general public through the stock exchange or private placements. It
operates under the regulatory framework of the Securities and Exchange Commission
of Pakistan (SECP) and is ideal for large-scale enterprises.

Key Features:

 Minimum Shareholders: At least 3; no maximum limit.

 Public Trading: Shares are traded publicly on stock exchanges.
 Legal Entity: Separate from its owners, ensuring limited liability.
 Capital: Enables raising large amounts of capital through public investments.

Advantages:

 Suitable for companies seeking rapid expansion.

 Increases credibility and public trust.
 Offers greater access to funds for long-term growth.

Notable public limited companies in Pakistan include Engro Corporation, Habib Bank
Limited, and Pakistan Petroleum Limited.

Source: Public limited Company vs Private limited Company

Single Member Company (SMC)

A Single Member Company (SMC) is a type of private limited company with only
one member and director. It is ideal for solo entrepreneurs who want limited liability
and a formal business structure.

Key Features:

 Separate Legal Entity: Independent from the owner.

 Full Control: Sole authority over all business decisions.
 Profit Ownership: Entire profit goes to the single member.
 Continuity: The company continues even after the death of the member.
 No Board Needed: No need for additional shareholders or directors.
 Limited Liability: The owner's personal assets are protected.

Source: TMRC – SMC vs Pvt Ltd

Foreign Company
A Foreign Company is an entity that is incorporated outside Pakistan but establishes a
place of business within the country. Under the Companies Act, 2017, such
companies are required to register with the Securities and Exchange Commission of
Pakistan (SECP) before commencing operations in Pakistan. This registration ensures
legal recognition and compliance with Pakistani corporate laws.
1. Name Reservation
 Apply online through the SECP portal for name availability and approval.
 The proposed name must not be offensive, deceptive, or similar to an existing
registered company.
2. Document Submission
The following documents must be submitted (typically Forms 38–43):
Certified copy of the company’s charter, statute, or memorandum and articles of
association.
 Complete details of the company’s directors and principal officers.
 Address of the principal place of business in Pakistan.
 Appointment and authorization documents for the local representative or officer.
 Authority letter in favor of the local representative.
3. Document Certification
 All documents must be certified by a public officer, notary public, or an
authorized officer of the foreign company, and authenticated by a Pakistani
consulate in the country of origin.
 Any documents in a language other than English or Urdu must be accompanied
by a certified translation.
4. Permission from the Board of Investment (BOI)
 A permission letter from the BOI is required for opening a branch or liaison
office in Pakistan.
 This permission must be renewed periodically, and a copy of the renewal must be
submitted to SECP.
Legal Status: Once registered, the foreign company is recognized as having a legal
presence in Pakistan. It must comply with local corporate, tax, and regulatory
requirements, including filing periodic returns and financial statements with SECP.
Source: Jamapunji – Foreign Companies
Shariah complaint company

Shariah complaint company means a company which is conducting its business

according to the principles of Shariah.

Source: https://www.secp.gov.pk/companies-act-2017/
Subsidiary company
The definition of ‘Subsidiary’ has been elaborated by specifying direct or indirect
holding. Indirect holding has been specified to be with one or more of its subsidiary
companies.
Previously subsidiary was defined where the holding company directly or indirectly
controlled more than fifty percent of its voting securities or had power to elect and
appoint more than fifty percent of its directors.
“Subsidiary company” or “subsidiary”, in relation to any other company (that is to
say the holding company), means a company in which the holding company:
(a) controls the composition of the Board; or
(b) exercises or controls more than one-half of its voting securities either by itself or
together with one or more of its subsidiary companies.
Provided that such class or classes of holding companies shall not have layers of
subsidiaries beyond such numbers, as may be notified.
Explanation - For the purposes of this clause:
 a company shall be deemed to be a subsidiary company of the holding company
even if the control referred to in sub-clause (a) or sub-clause (b) is of another
subsidiary company of the holding company;
 the composition of a company’s Board shall be deemed to be controlled by
another company if that other company by exercise of power exercisable by it at
its discretion can appoint or remove all or a majority of the directors;
 the expression “company” includes anybody corporate;
 “layer” in relation to a holding company means its subsidiary or subsidiaries.
Source: https://www.secp.gov.pk/companies-act-2017/

Governance structure under the Companies Act 2017.

Introduction:
Corporate governance refers to the system of rules, practices, and processes by which
a company is directed and controlled. The Companies Act, 2017 of Pakistan
significantly modernized and improved corporate governance standards, bringing
them closer to international best practices. The Act places significant emphasis on
transparency, accountability, and the protection of stakeholders' interests. This
assignment explores the governance structures embedded in the Act, highlighting the
role of the board of directors, corporate officers, shareholders, audit mechanisms, and
regulatory oversight.
Corporate governance includes the relationship of a company to its shareholders
and to society, the promotion of fairness, transparency and accountability, reference to
mechanisms that are used to "govern" managers and to ensure that the actions taken
are consistent with the interests of key stakeholder groups. The key points of interest
in corporate governance therefore include issues of transparency and accountability,
the legal and regulatory environment, appropriate risk management measures,
information flows and the responsibility of senior management and the board of
directors.7

1. The Board of Directors:

The Law recognizes a company, as a “legal person” which in its own rights, is
capable of owning property, making contracts, conducting litigations and also
responsible for doing wrongs. When we look at these matters from practical angle,
and at the way in which this artificial legal person functions; its corporate will is
manifested, its decisions taken and its acts performed, we see that a company cannot
do any thing at all except through the human beings.
Every company may strive to establish an effective board, which is collectively
responsible for the long-term success of the company. The size and composition of
the board may reflect the scale and complexity of the company’s activities.8
Composition and Appointment
1- No person can hold the office of a director of a listed company including as an
alternate director in more than five listed companies (listed subsidiaries of listed
holding company excluded).
2- Independent directors shall not be less than two members or one third of the total
whichever is higher.

3- At least one female director needs to be appointed whenever board is next

reconstituted or within the next one year whichever is later.
4- Executive directors, including the chief executive officer, shall not be more than
one third of the board. Executive director for this purpose means a director who
devotes whole or substantially the whole of his time (whether paid or not) to the
operations of the company.
5- Chairman and Chief executive officer shall not be the same person.
6- Minority members as a class shall be facilitated to contest election of directors by
proxy solicitation in prescribed manner.9

Duties and Responsibilities

Duties of Directors under the Ordinance:
1- Section 159: Calling of Extraordinary General Meeting
An extra ordinary general meeting may be called at any time by the directors for
consideration of any matter requiring approval of the company in a general meeting.
2- Section 160: Presiding General Meeting:
The chairman of the Board of Directors presides as chairman at every general meeting
of the company. If there is no such chairman, or if at any meeting he is not present
within fifteen minutes after the time appointed for holding the meeting, or is unwilling
to act as chairman, any one of the directors present may be elected to be chairman.
3-Section 174: First Directors
The first directors have the right to hold office until the election of directors in the
first annual general meeting.

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4-Section 180: Casual Vacancy on the Board of Directors
Any casual vacancy in the Board of Directors of a company is filled up by the
directors.
5-Section 191: Remuneration of the Directors:
The directors in general meeting determine the remuneration of a director for
performing extra services, including the holding of the office of chairman.10
Responsibilities of Board of Directors and its members
1- Board of directors shall carry out its fiduciary duties with a sense of objective
judgment and in good faith in the best interests of the company and its stakeholders.
2- Board is responsible for the governance of risk and for determining the company's
level of risk tolerance by establishing risk management policies. The board shall
undertake an overall review of business risks at least annually.
3- All directors of a company shall attend its general meetings unless precluded from
doing so due to any reasonable cause.
4- The chairman of the Board at beginning of term of each director, shall set the role,
obligations, powers and responsibilities in accordance with the Act and Company's
Articles.
5- Board shall maintain a complete record of particulars of the significant policies
along with their dates of approval or updating.
6- Board shall ensure that vision / mission statement, formal code of conduct, internal
control system and mechanism for an annual evaluation of the board's own
performance are in place.11
1. Shareholders' Rights and General Meetings
The Companies Act, 2017 is an Act to reform and re-enact the law relating to
companies and for matters connected therewith with an objective of regulating
corporate entities for protecting the “interests of shareholders”, among others.
Shareholders’ Rights
By purchasing a share in a company, a shareholder becomes a part owner of that
company and is thereby entitled to certain rights under the Companies Act, 2017.
These rights include,
• Right to the offer of shares by the company at the time of further issue of shares.
• Right to receive dividends.
• Right to participate and vote in general meetings.
• Right to elect and remove directors.
• Right to contest election for the position of director.
• Right to appoint auditors and fix their renumeration.
• Right to receive residual assets post-winding up of a company.
• Right to have various periodical reports.
• Right to have access to certain information of the company.12
General Meetings
General meetings are formal gatherings where shareholders exercise their decision-
making rights. The Companies Act, 2017 mandates the following types of meetings:
1. Annual General Meeting (AGM)
Every company is required to hold, a general meeting, as its annual general meeting
(AGM), within eighteen months from the date of its incorporation and thereafter once
at least in every calendar year within a period of four months following the close of its
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Business Recorder
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Pakistan Stock Exchange
financial year and not more than fifteen months after the holding of its last preceding
AGM.
2. Extra-Ordinary General Meeting (EOGM)
All general meetings of a company, other than the annual general meeting and the
statutory meeting are called extraordinary general meetings.
The directors may at any time call an extraordinary general meeting of the company
to consider any matter which requires the approval of the company in a general
meeting, and shall, on the requisition of members representing not less than one-tenth
of the voting powers on the date of the deposit of the requisition, forthwith proceed to
call an extraordinary general meeting.13
AUDIT AND FINANCIAL TRANSPARENCY:
Audits serve a significant role in providing financial transparency for companies,
nonprofits, and government entities. They give stakeholders confidence that the
financial information reported is accurate and unbiased. Audits also often uncover
weaknesses in internal controls and accounting procedures, allowing organizations to
strengthen their financial management.
The audit process typically involves several steps:
 Planning the audit: Auditors meet with the organization to understand their
business, systems, and risks. They then develop an audit plan to focus on high-risk
areas.
 Conducting a risk assessment: Auditors evaluate the company’s internal
controls and accounting processes to identify potential weaknesses and risks of
material misstatement.
 Testing transactions and account balances: Auditors test a sample of
transactions and account balances to verify that the financial records and statements
are fairly stated.
 Issuing an audit report: The auditors issue a report with their opinion on
whether the financial statements are presented fairly and in accordance with
accounting standards. They also report any internal control deficiencies found.
 Follow-up and monitoring: Auditors monitor and follow up to ensure their
recommendations are implemented to strengthen the organization’s financial
management and governance.
REFERENCE: https://urcapk.com/accounting-and-audit/understanding-the-role-of-
audit-in-ensuring-financial
AUDITORS:
An auditor is a person who is assigned the job to audit the financial statements of a
company in accordance with the provisions of law and auditing standards as
applicable in Pakistan.
AUDIT:
An audit is an unbiased examination and valuation of the financial statements of an
organization to form an independent opinion.
APPOINTMENT OF AN AUDITOR:
FIRST AUDITORS:
 The directors appoint the first auditor of the company within sixty days of the
date of incorporation of the company under section.
 The first auditor holds office until the conclusion of the first annual general
meeting of the company.
 If the directors fail to appoint first auditor, the members in general meeting of
the company may appoint the first auditor.
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 In case, the first auditor is not appointed within one hundred and twenty days
of the date of incorporation of the company, the Commission may appoint the auditor
to fill the vacancy.
SUBSEQUENT AUDITORS:
 On the conclusion of first annual general meeting, first auditor stands retired.
 Thereafter, the auditor is appointed by the members at an annual general
meeting and such auditor holds the office until the conclusion of the next annual
general meeting.
 The retiring auditor of the company is, however, eligible for re-appointment.
QUALIFIED FOR APPOINTMENT AS AUDITOR:
A chartered accountant is qualified to become the auditor of
 A public company or
 A private company which is a subsidiary of a public company or
 A private company having paid up capital three million rupees or more.
 An association not for profit
 And companies limited by guarantee, are also required to appoint a chartered
accountant as auditor.
REFERENCE: https://khilji.net.pk/appointment-of-an-auditor/
DUTIES OF AN AUDITORS:
The Companies Act, 2013, in Section 143, outlines the duties of an auditor in a
simplified manner. Here are some of the key duties of an auditor:
Preparing an Audit Report:
An audit report is a review of a business’s financial position. The auditor is
responsible for creating an audit report based on the company’s financial statements.
The books of accounts under examination must adhere to the applicable laws.
Additionally, the auditor must ensure that the financial statements comply with
relevant laws such as the Companies Act, 2013 and Accounting Standards.
Moreover, the auditor must guarantee that the financial statements present a precise
and fair view of the company’s financial position. A well-written audit report can help
businesses make informed decisions based on accurate financial information.
Conducting Inquiries:
One of the primary duties of an auditor is to make inquiries as needed. This includes
investigating whether loans and advances made based on security are properly
secured, whether any personal expenses are charged to the Revenue Account, whether
loans and advances are properly shown as deposits, and whether financial statements
comply with relevant accounting standards.
Assisting with branch audits:
If an auditor is a branch auditor rather than the auditor of an entire company, they will
provide assistance in the completion of the branch audit. They will prepare a report
based on the accounts of the branch and send it to the company auditor for inclusion
in the main audit report.
Complying with auditing standards:
The auditor must comply with Auditing Standards issued by the Central Government
in consultation with the National Financial Reporting Authority to perform audit
duties with relevant ease and accuracy.
Reporting fraud:
If the auditor suspects fraud or discrepancies in financial statements, they must report
the matter to the Central Government immediately and in the manner prescribed by
the Companies Act, 2013.
Adhering to the code of ethics and conduct:
The auditor is obligated to adhere to both the Code of Ethics and the Code of
Professional Conduct. These codes encompass various principles and guidelines that
govern the auditor’s behavior and actions. They include fundamental principles such
as confidentiality, due care, and professional scepticism.
Investigation Assistance:
If a company is being investigated, the auditor must help the officers with their needs.
This shows that an auditor’s job is quite varied and has a wide-reaching effect.
Audited financial statements offer a much higher level of assurance compared to
unaudited ones.
REFERENCE: https://ebizfiling.com/blog/duties-of-an-auditor/
CORPORATE OFFICERS AND MANAGEMENT:
The role of a corporate officer is to manage the business activities of a corporation.
The company’s directors usually appoint the corporate officers.
The organizational structure of a corporation typically includes officers who serve as:
 Chief executive officer: The highest-ranking manager with the company who
makes most of the major corporate decisions and serves as the public face of the
company.
 Chief financial officer: The senior executive who is responsible for managing
a corporation’s finances.
 Chief operating officer: The executive responsible for overseeing the day-to-
day operations of the corporation.
KEY TAKEWAYS:
 Corporate officers are usually appointed by the board of directors.
 Corporate officers make major corporate decisions and manage the company’s
day-to-day operations.
 Corporate officers are employees who must be paid reasonable compensation
if they provide more than minor services to the company.
Corporate Officers Manage Day-to-Day Operations
The officers conduct routine business for the corporation. In addition to what some
may think of as traditional officer positions, there are members of the team that fulfill
different roles, including:
 Chief design officer: A chief design officer oversees the company logo,
website, and other advertising.
 Chief marketing officer: A chief marketing officer is in charge of, as the title
suggests, the marketing and advertising of the business.
 Chief diversity officer: A chief diversity officer focuses on diversity and
inclusion within the business.
 Chief risk officer: A chief risk officer (CRO) is an executive who understands
and evaluates corporate risk. The CRO helps the corporation take smart risks.
 Chief value officer: A chief value officer is an executive that works to increase
the corporation’s value and maintain the value of the business long-term.
 Chief procurement officer: A chief procurement officer is in charge of
acquiring goods or getting services for the corporation.
REFERENCE:
https://www.findlaw.com/smallbusiness/business-operations/corporate-officer-
definition.html
REGULARTORY OVERSIGHT AND COMPLIANCE:
Regulatory oversight refers to the supervision and regulation of organizations,
industries, and institutions by a governing authority to ensure they operate within
legal and ethical frameworks. Compliance is the act of adhering to these rules,
regulations, and standards. In the business and financial sectors, regulatory oversight
and compliance play a critical role in maintaining transparency, protecting investors,
preventing fraud, and ensuring the overall health of the economic environment.
In most countries, regulatory bodies are established to enforce such compliance.
These bodies monitor and control operations in various sectors to safeguard public
interest. In Pakistan, the primary authority for regulating the corporate sector, capital
markets, insurance, and non-banking financial institutions is the *Securities and
Exchange Commission of Pakistan (SECP).
ROLE OF SECP:
The “Securities and Exchange Commission of Pakistan (SECP)” was established in
1999 under the Securities and Exchange Commission of Pakistan Act. Its primary
goal is to develop a fair, efficient, and transparent regulatory framework for the
corporate sector and capital markets in Pakistan. Over the years, SECP’s jurisdiction
has expanded to include insurance companies, non-banking finance companies
(NBFCs), pension funds, and various other financial entities.
Key Functions of SECP:
 Company Registration and Regulation: SECP is responsible for incorporating
companies and ensuring they follow the Companies Act, 2017.
 Market Supervision: It supervises stock exchanges and other market
intermediaries to ensure fair trading practices.
 Investor Protection: The SECP enforces rules that protect investors from
fraudulent practices.
 Policy Formulation: It recommends and implements policies for better
governance and corporate behavior.
 Monitoring and Enforcement: SECP investigates misconduct, conducts audits,
and imposes penalties on companies found violating laws.
 Anti-Money Laundering (AML): It issues guidelines to companies for
preventing money laundering and terrorist financing.
Compliance Requirements:
All companies registered with SECP are required to fulfill certain compliance
obligations to continue operating legally. These compliance requirements vary
depending on the type and size of the business but generally include the following:
REQUIREMENTS:
 Registration and Licensing: Every company must be properly registered with
SECP and obtain necessary licenses or approvals.
 Filing of Returns and Statements: Companies are required to file annual
returns, financial statements, and other periodic reports. These documents must meet
International Financial Reporting Standards (IFRS) or other relevant frameworks.
 Corporate Governance: Companies must follow SECP’s Code of Corporate
Governance which includes requirements for board composition, audit committees,
and risk management.
 Auditing and Disclosure: Companies must appoint SECP-approved external
auditors and disclose key financial information to the public and regulators.
 AML/CFT Compliance: Businesses must comply with Anti-Money
Laundering and Countering the Financing of Terrorism regulations by reporting
suspicious transactions and maintaining customer due diligence.
 Reporting Changes: Any significant changes in the company’s structure (e.g.,
change of directors, shareholding, or business address) must be reported to SECP in a
timely manner.
REFERENCE: https://www.secp.gov.pk/