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In this era of growing new specializations there is an increased need for common stakeholders to coalesce in order to represent their interests for addressing their new specialized issues and interacting with authorities which make regulations. Clearly the Trade Organization Act although serving its purpose has not kept pace with rapid changes nor the character of new stakeholders in new areas of endeavor. Attempts have been made by authorities to revamp and improve the Trade Organization Act in Pakistan, however, these changes have not yielded any progress nor enabled the established order to substantially accommodate the growth and variances in demand. Recently a group of very highly dedicated technical professionals coalesced under the Societies Act in order to avoid “press ganging”, which is endemic in any established order within the trade organization system. Indeed, the Societies Act is definitely one option available under our statutes and there are other options, which are increasingly being availed and examined in order to avoid coalescing under the Trade Organizations Act.

In my opinion the Trade Organizations Act, the way it is, may continue to evolve as per its established order, as it is serving its purpose whatever the shortcomings. At the same time, the government should examine new legal provisions for common stakeholder representation in view of specialized interests and requirements for capacity building in the context of trade, investment and technology. One may ask as to why alternate structures are required when the Trade Organizations Act and other options already exist. The answer is very simple: Because the established order already has a myriad of commitments in place for the many established constituencies whose interests it represents., It ttherefore, inadvertently becoming a bottleneck thereby precluding new developments, new spheres of enterprise and new common stakeholder interests, especially in a country with a growing population and increased spheres of specific and specialized interests, which require forums for institutionalized policy making interaction.

It is sometimes unavoidable for bottlenecks to be created which then favor only the larger and longstanding interests of the established order, therefore resulting in stifling of change and progress. New professions are generational and are only interested in their specific and specialized fields of endeavor along with common stakeholder capacity building that is relevant to them. They are not interested to engage in issues which are not immediately relevant to their specialized subject.

It is in light of the above that I am a fan of the “Section 21” concept of the Companies Ordinance of Hong Kong and seek its inclusion by the SECP in the Companies Ordinance of Pakistan for grant on a selective basis. I understand that there are other provisions within the Companies Ordinance in Pakistan such as Section 41, Societies Act, AOPs etc. None, however, fulfill the requirement as comprehensively and practically as the Section 21 of the Companies Ordinance of Hong Kong. This provision has a remarkable track-record of success and is worth considering. I have taken this opportunity to reproduce hereunder the text of this law to emphasize the importance of this option based on our experience and its success elsewhere. I hope ICC Pakistan members will support this proposal to become one of our new objectives in the coming year.

COMPANIES ORDINANCE OF HONG KONG
SECTION 21

“Power to dispense with certain words in name of charitable and other companies”

(1) Where it is proved to the satisfaction of the Registrar that an association about to be formed as a limited company is to be formed for promoting commerce, art, science, religion, charity or any other useful object, and intends to apply its profits, if any, or other income in promoting its objects, and to prohibit the payment of any dividend to its members, the Registrar may by licence direct that the association may be registered as a company with limited liability, without the addition of-

(a) if the name of the association is in English, the word "Limited" to its name;

(b) if the name of the association is in Chinese, the expression in Chinese "有限公司" to its name; and

(c) if the name of the association is both in English and Chinese, such word and expression to its name in English and Chinese respectively, and the association may be registered accordingly and shall, on registration, enjoy all the privileges and (subject to the provisions of this section) be subject to all the obligations of limited companies. (Replaced 3 of 1997 s. 9)

(2) Where it is proved to the satisfaction of the Registrar-

(a) that the objects of a company registered under this Ordinance as a limited company are restricted to those specified in subsection (1) and to objects incidental or conducive thereto; and

(b) that by its constitution, the company is required to apply its profits, if any, or other income, in promoting its objects and is prohibited from paying any dividend to its members, the Registrar may by licence authorize the company to make by special resolution, a change in its name including or consisting of the omission of the word "Limited" or the expression in Chinese "有 限公司" or both such word and expression, as the case may be, and subsections (4) and (5) of section 22 shall apply to a change of name under this subsection as they apply to a change of name under that section. (Amended 3 of 1997 s. 9)

(3) A licence by the Registrar under this section may be granted on such conditions and subject to such regulations as the Registrar thinks fit, and those conditions and regulations shall be binding on the body to which the license is granted, and (where the grant is under subsection

(1) shall, if the Registrar so directs, be inserted in the memorandum and articles, or in one of those documents.

(4) A body to which a licence is granted under this section shall be exempted from the provisions of this Ordinance relating to the use of the word "Limited" or the expression in Chinese "有限公 司" or both such word and expression, as the case may be, as any part of its name, the publishing of its name and the sending of lists of members to the Registrar. (Amended 3 of 1997 s. 9)

(5) A licence under this section may at any time be revoked by the Registrar, and upon revocation, the Registrar shall, where the name upon the register of the body to which it was granted is- (a) in English, enter the word "Limited" at the end of that name;

(b) in Chinese, enter the expression in Chinese "有限公司" at the end of that name; or

(c) both in English and Chinese, enter such word and expression at the end of its name in English and Chinese respectively, and the body shall cease to enjoy the exemptions and privileges or, as the case may be, the exemptions granted by this section: Provided that before a license is so revoked, the Registrar shall give to the body a notice in writing of his intention, and shall afford it an opportunity of being heard in opposition to the revocation. (Amended 3 of 1997 s. 9)

© Tariq M. Rangoonwala. All rights reserved. The contents above are the intellectual property of Mr. Tariq M. Rangoonwala. The reproduction, publication, use, amendments, modification of any kind whatsoever of any part(s) without prior written permission and consent is prohibited.