The Securities and Exchange Commission of Pakistan (SECP), aiming to facilitate corporate sector, has amended the First Schedule to the 1984 Companies Ordinance, containing articles of association of companies vide its SRO 194(I)/2013. The amendments broadly relate to the areas of alternative dispute resolution (ADR) mechanism, dividend payments mode, holding of the meetings of the Board of Directors through tele/video conferencing, sending of notices through email, and procedure for election of directors for companies limited by guarantee and not having a share capital. In order to provide a tool for dispute resolution between the company or its shareholders or between the directors or the shareholders, new provisions have been added to Tables A and C. The said provisions seek to encourage directors, shareholders and other stakeholders to solve their disputes without recourse to courts of law. Amendments have also been made to Table A of the First Schedule, enabling the companies to make payment of dividend in cash and/or in specie. Earlier, such facility was not clarified in the relevant provisions. As per previous provisions, it was not necessary to give notice of directors’ meeting to any director who was out of country for the time being. Now, owing to the amendment to Tables A and C of the First Schedule, it has been made easier to send notice to directors, whether in the country or out of country, via email, which will be considered a valid notice. Keeping in view the technological advances, new provisions in Tables A and C have been added to facilitate directors to hold meetings through tele/video conferencing in emergency situations, where it is not possible for them to be physically present at the venue of the meeting. This provision shall increase directors’ participation in meetings. Lastly, to make provisions for holding of election in companies limited by guarantee and not having share capital, a new provision has been added to Table C, which mandates that the directors of the company shall be elected in accordance with the provisions of the ordinance.
