ISLAMABAD (April 15 2004): The Securities and Exchange Commission of Pakistan (SECP) has launched a second 'guide series' booklet named 'Directors' and Secretaries' Guide' to improve the conduct of both key officials and help supplement their legal acumen and skill.
Releasing the booklet, the Member of Companies Law, Abdur Rahman Qureshi, told newsmen here that the SECP is issuing the guide series to create public awareness in order to strengthen and develop a modern, efficient and dynamic corporate sector.
This is the second book in the series, while the first was the 'Promoters Guide'.
The new book concentrates on the responsibilities and duties of the directors and secretaries.
The motive behind the guide series is to build, reinforce and uplift the virtues of corporate governance in the management of the corporate entities of the country.
The new booklet 'Directors and Secretaries Guide' would improve the conduct of the management functions of both directors and secretaries.
Qureshi said that the guide books would ultimately enhance compliance to the corporate laws and secretarial practices.
The law necessitates appointment of directors for all companies while the appointment of 'company secretary' is mandatory only for a single-member company and a public listed company.
These managers of companies have been assigned certain duties and responsibilities under the Companies Ordinance, 1984. Failure to comply with these may result in legal proceedings and weak corporate compliance; therefore, it is imperative that those becoming directors and secretaries understand what is required of them.
The booklet looks at how these officers can best comply with their obligations, giving an overview of their duties and responsibilities to the Commission and the Company Registration Offices (CROs).
ROLE OF DIRECTOR: The role of a company director has been illustrated in detail. According to it, a minor, an undischarged insolvent, a person convicted by a court of law for an offence involving moral turpitude, a person who has betrayed lack of fiduciary behaviour, a defaulter in repayment of loan to a financial institution as declared by the court, and a member of a stock exchange engaged in the business of brokerage etc cannot be a director of a company.
According to the guideline, the company director has to ensure that statutory documents are filed with the Registrar and the Commission as and when required under the Ordinance.
Particulars for auditing accounts (only for public limited companies), annual returns, particulars of directors or other officers, and notice of change of registered office have also been given in detail.
The consequences of non-compliance of the legal formalities have been discussed in detail, specially mentioning that failure to deliver documents on time is an offence under the Ordinance and the directors are adjudicated/prosecuted for failing to file accounts and other statutory returns with the Registrar within the prescribed time.
Structure of late filing fee in case of delayed filing has also been covered, with the emphasis that only timely compliance of the filing obligations can avoid the penalties.
COMPANY'S SECRETARY: While elaborating the role of a company secretary, his prescribed qualification has also been mentioned along with the duties pertaining to filing the statutory returns.
His other duties include maintaining the statutory registers, providing members and auditors with notice of meeting, sending the Registrar copy of special resolutions, supplying a copy of the accounts to every member of the company and keeping or arranging for the having of minutes of directors' meetings etc.
The Guide further describes that Company directors and secretaries are responsible for filing various returns containing information to the Commission and the Registrar. There are over 46 forms which companies may file.
The most common forms and documents which companies will file include annual audited accounts (only for public companies, associations not for profit, and by guarantees).
Listed companies are also required to send quarterly accounts to the Commission and the Registrar. An annual return on Form A/B is required to be filed once in each year.
It is vital that the information regarding the location of registered office address of every company is available with the Registrar to send all formal communications.
Any change in this is notified to the Registrar by filing a notice for change.
Further, the companies are required to communicate all changes in particulars of directors and other officers such as any appointment, any officer's ceasing to act (resignation, removal, death etc) or a change in details of an officer by filing return with the Registrar.
Return of allotment should be sent to Registrar informing any further allotment of shares and the particulars of any mortgage or charge created by the company, modification or satisfaction thereof must be sent to Registrar on the respective forms.
The booklet further lays down the quality guidelines to follow when preparing a document for filing with the Registrar.
Guidance booklets are available from the Commission and its Regional Offices (CROs) or at the Commission's website www.secp.gov.pk.