SECP Updates Companies Rules

Hi Everyone! Hope you are all doing well. Welcome back to another blog. Today we will talk about everything you need to know about SECP Updates Companies Rules. SECP approves capital expenditure or disposal of fixed assets for public interest companies, large-sized companies, and medium-sized and small-sized companies. In a recent development, the SECP issued S.R.O.627(I)/2023, introducing amendments to the Companies (General Provisions and Forms) Regulations, 2018. On Friday, SECP enacted regulatory changes. These changes empowered them to review and sanction the allocation of funds or sale of assets for companies.

SECP regulations require capital expenditure of more than Rs 25 million for public interest or large-sized companies. Book value for fixed asset disposal should be greater than Rs 5 million or 1% of total assets. Regulations ensure proper financial management and transparency.

For medium-sized and small-sized companies, it is mandatory that the amount of capital expenditure to be incurred on any single item shall exceed Rs5 million. Similarly, when it comes to disposing of a fixed asset, the book value must be higher than Rs1 million or one percent of the total assets of the company, whichever is lower. However, a committee constituted by the board, comprising at least one director, can approve any expenditure or disposal falling within the aforementioned limits. This committee is responsible for submitting a post facto report to the board on a bi-annual basis, solely for informational purposes.

SECP has recently introduced an amendment stating that the board of directors possesses the power to approve capital expenditure or disposal of fixed assets, regardless of any specified limits. It is important to note that this approval is subject to the provisions outlined in subsection (3) of section 183 of the Act.

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