The Securities and Exchange Commission of Pakistan (SECP) has directed companies with paid-up capital exceeding Rs. 20 million to appoint practising advocates as legal advisors. The regulator has warned that companies failing to meet this requirement could face legal action.
The directive follows Section 10 of the Lawyers Welfare and Protection Act, 2023. Under this provision, every incorporated company meeting the specified capital threshold must appoint at least one practising advocate.
Companies must hire these legal advisors on a retainership basis. This arrangement requires firms to retain legal professionals to provide advice and support on legal matters.
The law also sets limits on the number of companies an advocate can serve. A practising advocate may act as a legal advisor for no more than three eligible entities at the same time.
The requirement aims to establish a formal legal advisory arrangement for companies covered by the law. Businesses must ensure their appointments comply with the relevant provisions and professional requirements.
The SECP has advised all companies falling within the specified category to appoint their legal advisors without violating the applicable legal framework. It has also instructed them to submit the required information to the Registrar.
Companies must report the details of their appointed legal advisors through Form-9. This filing requirement falls under Section 197 of the Companies Act, 2017.
The submission allows the Registrar to receive information about companies’ compliance with the legal advisory requirement. Eligible businesses should ensure their records and filings meet the prescribed requirements.
The regulator has made it clear that non-compliance could result in enforcement action. Companies that fail to follow the relevant legal provisions may face proceedings under the applicable laws.
The directive highlights the importance of meeting statutory obligations for incorporated businesses in Pakistan. Companies with paid-up capital above Rs. 20 million should review their current arrangements and determine whether they meet the requirement.
Businesses that have not appointed a practising advocate may need to make the necessary arrangements. They should also ensure that their legal advisors do not exceed the limit of three eligible entities.
The SECP’s announcement serves as a reminder for companies to review their legal compliance procedures. Timely appointments and accurate regulatory filings can help businesses meet their obligations under Pakistani law.
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Companies affected by the requirement should consult the relevant legislation and official regulatory guidance. They can then confirm the necessary appointment and reporting procedures before taking further action.
