The Securities and Exchange Commission of Pakistan (SECP) has relaxed conditions for the grant of license to non-profit associations regarding multiple objectives, start-up donation, mandatory registration within three months and criteria for credit information bureau reports.
According to a statement by SECP certain changes have been made to the conditions for grant of license to non-profit associations under Section 42 of the Companies Ordinance, 1984, regarding multiple objectives, start-up donation, mandatory registration within three months, and criteria for credit information bureau (CIB) reports.
Previously licensing was allowed to associations having a single objective. However, it was noticed that many genuine cases that required multiple objectives were denied license and were required to curtail their proposed activities to a single objective, causing impediments to charitable and welfare-oriented causes. After the changes an association would be allowed to promote multiple objectives.
The condition of start-up donation by each promoter of at least Rs200,000 has been relaxed, as it was detrimental to corporate growth. It was observed that many skilled and professional persons were reluctant to become subscribers of associations due to this condition.The association obtaining license is required to get itself incorporated as a company under the ordinance within a period of three months of the date of license.
There was no mechanism to allow incorporation to subscribers that did not turn up for incorporation within the stipulated period. To provide a remedy to such subscribers the licensing authority, in special circumstances, may extend the time period on an application made by the applicants for grant of such extension.While processing a case for the grant of license to an association the CIB reports are called from State Bank of Pakistan and license was granted on obtaining clear CIB reports of promoters.
