SECP issues circular enabling startups to increase capital against property

SECP allows startups to raise capital against property

SECP issued a circular No 11 of 2021 explicitly allowing private companies and startups to increase capital by receiving immovable property, intangible assets and services from investors.

Securities and Exchange Commission of Pakistan (SECP) allows to business startups to increase capital. The decision was taken for the support of businesses especially startups and small business units.

The Securities and Exchange Commission of Pakistan (SECP) issued a circular. Where SECP allows private companies to increase capital against immovable property, intangible assets and services from investors. This decision taken at supporting entrepreneurship and encouraging business climate for small business units and firms. Especially, business startups and potential business investors.

The Securities and Exchange Commission of Pakistan (SECP) explained that private companies could raise finances from the investors other than their current shareholders to finance their working capital requirements in the business.

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Circular 11 of 2021 Issuance of Shares under Companies Act 2017

This circular No. 11 of 2021 under Companies Act 2017 issued to bring-in the desired clarity with regard to section 83 of the Companies Act, 2017. By Allowing all companies, both private and public, to issue shares by way of “right”. Either for cash or a consideration otherwise than in cash. Subject to compliance with section 70 of the Companies Act 2017, and enabling private companies to increase equity from outside their existing members / shareholders.

SECP Circular Raise Capital By Startups
Circular 11 0f 2021 of SECP

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SECP | Startups | Capital | Shares | Businesses | Securities & Exchange Commission of Pakistan |

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