SOHAIL SARFRAZ

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has issued a detailed list of prohibited names which cannot be incorporated by new companies, including names associated with any political personality, bureau/division, department, undertaking, court/judiciary/judge and names of international bodies and donor agencies.

The SECP Friday issued SRO 704(I)/2017 to notify Companies (Incorporation) Regulations, 2017 to be applicable from August 14, 2017.

According to the SECP regulations, following words and combinations thereof shall not be used in the name of a company in English or any of the languages depicting the same meaning: Federal Government, Provincial Government, Name depicting association with any foreign government, name suggesting association with any political personality, Commission, Authority, Register or Registered. Co-operative, Bureau, Division, Department, Undertaking, Municipal, Union, Republic, Nation, President, Governor, Prime Minister, Chief Minister, minister, Cabinet Senate, National Assembly, Parliament/Parliamentary, Statute/Statutory, Court/Judiciary/Judge, Administrator.

The following words and combinations shall not be used in the name of a company including names of International bodies and  abbreviations thereof including, but not limited to, United Nations, South Asian Association for Regional Cooperation, Organization of Islamic Conference, world Bank, International Finance Corporation, Asian Development Bank, Islamic Development Bank, International Monetary Fund, Red Cross, Red  Crescent.

Provided that the Commission may allow any of the said names under special circumstances on the request of any government of authority.

Following words and combinations thereof may only be used in the name of a company subject to the criteria mentioned in each case: First category is Association or Foundation. In case of companies to be established on grant of license by the Commission under section 42 of the Act or which are licensed by the Directorate General of Trade Organizations under the Trade Organizations Act, 2013. 

Second category is Fund. In case of a public sector company, a trade organization, a Non-Banking Finance Company to be established to undertake asset management services or private equity and venture capital fund management services subject to prior approval of he Commission or a company to be established on grant of license by the Commission under section 42 of the Act.

Following words and combinations thereof may only be used in the name of a company subject to the criteria mentioned in each case:

Bahria/Askari/Fauji/Fazaiya/Cadet/Armed Forces or Forces/Army/Navy/Air Force/Shaheen/ Military/Defence. In case of companies to be established by the relevant agency.

Bank/ Banking/ Banker: In case of companies to be established to undertake business subject to prior approval of State Bank of Pakistan or an investment bank subject to prior approval of the Commission.

Charter/Chartered: In case of companies having charter from the sovereign authority of the Federation or the Province.

Corporation: In case of companies where proper justification is subject to the satisfaction of registrar.

Exchange/ Bourse: In case of Securities Exchange, Commodity Exchange, Mercantile Exchange and Exchange Company, subject to prior approval from  the relevant authority.

Familiar Trade Names or Brand names: In case of a company where permission of families trade name or brand name user is provided or proper documentary evidence of ownership /use of trade name or brand name is furnished by the applicant to the satisfaction of the registrar.

Famous/District personalities: In case of a company where proper justification is submitted to the satisfaction of registrar.

Federation: In case of a company licensed under section 42 of the Act or trade bodies under Trade Organizations Act, 2013.

The SECP has also specified other words and combinations which may only be used in the name of a company subject to the criteria mentioned in each case.

The SECP said that name shall be considered undesirable, if it includes the name of a registered trade mark or a trade mark which is subject of an application for registration, unless the consent of the owner or applicant for registration of the trade mark, as the case may be, has been obtained and produced by the promoters.

The SECP said that any person desirous of forming a company shall have the option to file either separate or combined application for reservation of name and incorporation of company. Provided that the application shall be filed either through e-service or in physical form.

The applicant shall propose three names for the company in the order of priority, out of which any one may be approved by the registrar subject to fulfillment of criteria mentioned in these regulations and section 10 of the Act.

An applicant shall make an application either through e-service or in physical form to the registrar for incorporation of company as per Annexure-IV along with the specified documents.

The memorandum of association shall contain an undertaking that the company shall not engage in any of the restricted business, launch multi-level marketing (MLM), Pyramid and Ponzi Schemes, or other related activities/ business or any lottery business, or engage in any of the permissible business unless the requisite approval, permission, consent or license is obtained from competent authority as may be required under any law for the time being in force.

For the purposes of the regulation, “restricted business” means undertaking or indulging, directly or indirectly in the business of a Banking Company, Non-Banking Finance Company, Mutual Fund, Private Fund, Leasing, Investment Company, Investment Advisor, REIT Management Company, Housing Finance Company, Discounting Services, Microfinance or Micro credit business, Insurance Business, Modaraba Management Company, Stock Brokerage business, forex managing agency, business of providing the services of security guards, securities broker, securities adviser, securities manager, share registrar, credit rating company, balloter, underwriter, debt securities trustee or any other business restricted under any law for the time being in force or as may be notified by the Commission.

In the case of a company limited by guarantee or an unlimited company, the company shall file the articles of association signed by the subscribers to the memorandum with the registrar along with application for incorporation, SECP said.

Where the subscriber is a body corporate, the articles of association shall be signed by a natural person duly authorized in this behalf by a resolution of the board of directors of the body corporate or designated partner of the limited liability partnership, the SECP added.