Changing the ownership of a registered business in Pakistan involves a series of legal and administrative procedures that must be followed to ensure that the transfer of ownership is legally recognized and valid. In this article, we will discuss the steps involved in changing the ownership of a registered business in Pakistan.
Check the Company’s Articles of Association
The first step in changing the ownership of a registered business in Pakistan is to check the company’s Articles of Association. The Articles of Association are a legal document that outlines the rules and regulations that govern the company. It is important to review this document to ensure that there are no restrictions on the transfer of ownership. If there are any restrictions, the parties involved in the transfer of ownership will need to follow the procedures outlined in the Articles of Association.
Obtain No-Objection Certificates (NOCs)
Before the ownership of a registered business can be transferred, the parties involved must obtain No-Objection Certificates (NOCs) from various regulatory bodies. The NOCs are required to ensure that the transfer of ownership does not violate any laws or regulations. The regulatory bodies that issue NOCs may vary depending on the type of business being transferred. For example, if the business is a pharmaceutical company, the parties involved may need to obtain NOCs from the Drug Regulatory Authority of Pakistan.
Execute a Share Purchase Agreement
Once the parties have obtained the necessary NOCs, they can execute a Share Purchase Agreement (SPA). The SPA is a legal document that outlines the terms and conditions of the transfer of ownership. The SPA should include the names of the parties involved, the number of shares being transferred, the purchase price, and any other conditions that need to be fulfilled before the transfer is complete.
Pay Stamp Duty
Once the SPA has been executed, the parties involved will need to pay stamp duty. Stamp duty is a tax that is imposed on legal documents to make them legally valid. The amount of stamp duty that needs to be paid will depend on the value of the shares being transferred. The stamp duty can be paid at any authorized bank.
Transfer of Shares
Once the stamp duty has been paid, the parties involved can proceed with the transfer of shares. The transfer of shares should be done in accordance with the procedures outlined in the SPA. For example, if the shares are being transferred electronically, the parties involved will need to follow the procedures outlined by the Central Depository Company of Pakistan.
Inform the Securities and Exchange Commission of Pakistan (SECP)
After the transfer of shares has been completed, the parties involved should inform the Securities and Exchange Commission of Pakistan (SECP). The SECP is the regulatory body that oversees the registration and regulation of companies in Pakistan. The parties involved will need to submit a Form 29, which is a document that notifies the SECP of the change in ownership.
Update Business Records
Once the SECP has been notified of the change in ownership, the parties involved will need to update the business records. This includes updating the company’s Memorandum and Articles of Association, as well as updating any other legal documents that may be affected by the change in ownership.
In summary, changing the ownership of a registered business in Pakistan involves a series of legal and administrative procedures that must be followed to ensure that the transfer of ownership is legally recognized and valid. The steps involved include checking the company’s Articles of Association, obtaining No-Objection Certificates, executing a Share Purchase Agreement, paying stamp duty, transferring the shares, informing the Securities and Exchange Commission of Pakistan, and updating the business records. It is important to follow these procedures carefully to ensure that the transfer of ownership is done legally and effectively.
