Having the main goal of helping both start-up and small business owners, security and Exchange Commission of Pakistan (SECP) has provided a circular stating that land, intangible assets, and services can be used to support small business ventures.
SECP also stated that corporations can obtain financing from investors other than from their current shareholders for working capital, other potential products & services and innovations, and company growth are listed in the release.
By widening access to investors’ pool and overall accessibility, it will allow startups to source capital from a larger pool of investors and in a variety of methods instead of only in cash. Additionally, this is advantageous to businesses that are trying to move their assets or increase equity by means of creation.
The circular is intended to bring clarification on section 83 of the Companies Act, which currently allows securities to be sold in both private and public companies for either for cash or on the market.
In light of these startup and emerging global developments, some jurisdictions, such as New Zealand and Malaysia, have placed DB administration reforms in place.
The SECP strives to create a business climate that encourages growth and expansion, as well as removing regulatory impediments that render doing business in the country has.
