The corporate sector in Pakistan is governed by the Companies Ordinance 1984which was promulgated on 8
October 1984 and repealed the Companies Act, 1913.The avowed objectives of the Companies Ordinance 1984 were
toconsolidate and amend the law relating to companies and certain other associationsfor the purpose of healthy growth of corporate enterprises, protection of investors andcreditors, promotion of investment and development of economy. The detailedprovisions of the Companies Ordinance, 1984 sought to meet these objectives andhave been amended and updated from time to time to keep in line with the changingcircumstances.The major amendments to the Companies Ordinance, 1984 were made through theFinance Act 1995, the Finance Act 1999, the Companies (Amendment) Ordinance,2002 and the Companies (Second Amendment) Ordinance, 2002. The Finance Act,1995 repealed the Capital Issues (Continuous of Control) Act, 1947, which gavediscretionary powers to the Federal Government to control the issue of share capitalby companies and made several consequential amendments in the CompaniesOrdinance 1984. Subsequently, the Finance Act 1999 allowed companies to issueshare capital of different kinds and classes in accordance with their memorandum andarticles of association. The Finance Act 1999 also allowed listed companies to buyback their own shares subject to prescribed terms and conditions.In 2002, the concept of “single member company” was introduced in the CompaniesOrdinance, 1984 through the Companies (Amendment) Ordinance, 2002. Theintroduction of this concept has facilitated sole proprietorships to obtain corporatestatus and has given them the privilege of limiting the liability of their proprietors. Theamendment has also been a positive step in encouraging the documentation of theeconomy. Also, through this Ordinance, the minimum number of members anddirectors of a non-listed public company was reduced from seven to three, theeligibility requirements for directors of listed companies were tightened and listedcompanies were required to appoint whole-time professionally qualified secretaries.The Companies (Amendment) Ordinance, 2002 also strengthened the financialreporting requirements of companies by mandating listed companies to publish andcirculate quarterly accounts and by reducing the period for holding the annual generalmeeting of a company from six months to four months from the close of the financialyear.