The Securities and Exchange Commission of Pakistan (SECP), as a part of its initiative to review the corporate laws administered by it, has taken a lead to suggest reforms to the Partnership Act, 1932 (“Act”). SECP Chairman Zafar Hijazi has assigned this task to an in-house committee to review the Act and suggest reforms.
The committee has completed its assignment and submitted a report to the SECP chairman. Besides, the SECP has also associated the professional accounting bodies – ICAP and ICMAP – to have the said Act thoroughly examined and submit their suggestions to the commission within two weeks. After receiving the input of accounting bodies, the SECP intends to present a consolidated report of recommendation to the relevant authorities at the federal and the provincial level of government.
The committee after a thorough review of the Act and comparative analysis of the respective laws of various international jurisdictions while recognising the essential factors to facilitate the promotion and proper regulation of the partnership form of business, deliberated on various aspects of the Act which inter alia include status of the partnership form of business and its recognition as a legal entity, mandatory registration of partnerships in writing, the filing requirements and its significance, suggestions concerning names of partnerships, restrictions on adoption of identical or deceptive names and proper and fair maintenance of business record.
Besides the above, the committee also proposed to introduce the concept of business registration through appropriate legislation which is in practice in most of the developed jurisdictions of the world, the concept of designated partners, audit requirements for the firms running sizeable business and having substantial turn over, and the suggestion for automation of the record and filing requirements under the Act.
