Pakistan’s corporate landscape is undergoing a major clean-up as the Securities and Exchange Commission of Pakistan (SECP) has officially published a list of more than 200 inactive companies that will soon be struck off the corporate register.

This move comes as part of the government’s wider effort to remove dormant, inactive, or non-compliant businesses, ensuring that the national corporate registry reflects only active and legitimate companies.

The SECP announced the move on 25 November 2025, inviting public objections within 90 days—as required under Sections 425 and 426 of the Companies Act 2017.

This detailed article explains:

• Why SECP is removing these companies
• The legal process behind the strike-off
• What it means for company directors
• How objections can be filed
• Impact on Pakistan’s business sector
• Step-by-step breakdown of Easy Exit Regulations

Let’s dive into the complete breakdown.

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Why Is SECP Removing 200+ Companies?

The SECP regularly monitors Pakistan’s corporate database and identifies companies that are inactive, non-functional, or violating legal conditions.

In this case, over 200 companies voluntarily requested removal under the Easy Exit Regulations 2014.

These companies officially declared that:

• They have no assets
• They have no liabilities
• They are not doing business
• They owe no taxes or dues
• They have no loans with banks or institutions

All declarations were also verified by auditors and chartered accountants, proving that these firms are not operational.

The strike-off process prevents fraudulent or inactive entities from remaining in Pakistan’s corporate system.

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Legal Basis: SECP’s Authority Under Companies Act 2017

SECP’s cleaning process is backed by two major legal sections:

Section 425 – Removal of Names from Register

This section allows the SECP to remove companies that are not carrying on business or are dormant.

Section 426 – Voluntary Application for Strike-Off

This section allows companies to apply voluntarily for removal if they:

• Are not working
• Have no liabilities
• Want to permanently close operations

Since all 200+ companies submitted written declarations, SECP has accepted their applications and issued formal notices.

Step-by-Step Breakdown: How the Strike-Off Process Works

To make this process clearer, here is the exact SECP procedure in simple steps:

Step 1: Company Decides to Close

The board of directors passes a resolution to shut down operations.

Step 2: Company Files “Easy Exit” Application

An application is filed under Companies Easy Exit Regulations 2014.

Step 3: Declaration of No Assets or Liabilities

The company must prove it:

• Has no assets
• Has no liabilities
• Is not operating

This declaration must be verified by an auditor.

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Step 4: SECP Publishes Public Notices

SECP publishes names of such companies in national newspapers or official notifications.

This is exactly what happened now.

Step 5: 90 Days Objection Period

Any concerned person—such as creditors, banks, partners, or the general public—may file objections.

Step 6: Removal From Register

If no objections arise, SECP removes the company from the register and declares it dissolved.

What Happens After the 90-Day Objection Period?

After the 90-day period ends:

• The companies will be legally dissolved
• Their names will be struck off the corporate register
• They will no longer exist as legal entities
• Directors will not be allowed to use the company’s name again
• The firm cannot conduct any business after removal

However, former directors may still face action if:

• They hid assets
• They had unpaid liabilities
• They violated tax rules
• They engaged in financial fraud

The SECP and FBR can still investigate past actions.

Why Companies Choose the Easy Exit Route

Many businesses in Pakistan file for strike-off because:

No Operations / Business Failure

They stopped business activities years ago.

Avoiding Compliance Penalties

Inactive companies must still file annual returns. Instead of paying fines, they choose to dissolve.

Cost Cutting

Maintaining a company costs money (returns, audits, filings).

Partnerships Ended

Many small companies close after partner disputes.

Market Exit

Some foreign or local companies exit Pakistan’s market voluntarily.

Impact on Pakistan’s Business & Economic Sector

The SECP’s action has several major impacts:

1. Cleaner Corporate Registry

Removing irrelevant companies makes Pakistan’s corporate data more reliable for:

• Investors
• Regulators
• Banks
• Foreign partners

A clean database increases transparency and trust.

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2. Reduction in Corporate Fraud Risks

Dormant companies often become vehicles for:

• Money laundering
• Tax evasion
• Illegal trade
• Benami transactions

Strike-off reduces these risks significantly.

3. Better Investment Climate

A transparent corporate ecosystem helps:

• Improve Pakistan’s ranking in global ease of doing business
• Encourage foreign direct investment (FDI)
• Strengthen corporate governance

4. SECP Enforcement Becomes Easier

Removing inactive entities allows the SECP to focus on operating companies, improving regulatory efficiency.

Details About the 200+ Companies Being Removed

SECP has not publicly disclosed detailed profiles of each company in this announcement, but the list includes:

• Private limited companies
• Trade & export firms
• IT startups
• Real estate & construction companies
• Small partnership-like private companies
• Dormant firms inactive since years

All these companies voluntarily applied for dissolution.

How Can Someone File an Objection With SECP?

Anyone who has a claim against any of these companies can file an objection within 90 days.

Where to File?

Objections must be submitted to the SECP Registrar Office where the company is registered.

Who Can Object?

• Creditors
• Business partners
• Banks
• Government departments
• Individuals with legal claims

What Must the Objection Include?

• Name of company
• Reason for objection
• Proof of outstanding dues
• Contact details of claimant

The SECP will then review the objection and decide whether the company can be removed or not.

What Directors & Shareholders Should Know

If a company is removed:

They cannot legally conduct business anymore

Any business must now be registered under a new entity.

Company name cannot be reused immediately

It becomes restricted.

Directors remain responsible for past actions

Liabilities before dissolution can still be investigated.

Assets cannot be claimed after dissolution

If assets are later discovered, SECP may restore the company.

Is Strike-Off the Same as Liquidation?

No. These are two different processes.

Strike-Off (Easy Exit):

• For companies with zero assets and zero liabilities
• Faster and simpler
• Used by small businesses and inactive firms

Liquidation:

• For companies with assets, employees, or liabilities
• Overseen by a liquidator
• Takes longer and involves selling assets

The companies removed under this announcement are all Easy Exit applicants.

How This Action Helps Pakistan’s Corporate Sector

Supports transparency

Increases reliability of national business data.

Improves regulatory compliance

Discourages companies from staying on register without meeting legal requirements.

Saves costs for government

Less monitoring of non-operational companies.

Strengthens investor confidence

A clean and active corporate environment attracts investment.

Final Summary

The SECP’s decision to remove more than 200 companies highlights Pakistan’s move toward a cleaner, more compliant, and fraud-free corporate environment.

Since the companies themselves applied for removal and declared no liabilities, the SECP has followed the law and initiated the strike-off process. After 90 days, these companies will officially be dissolved unless someone objects.

This initiative strengthens corporate governance and improves transparency across Pakistan’s business sector.

Frequently Asked Questions (FAQs)