The corporate regulator has taken action against thousands of companies for failing to submit mandatory annual returns and financial statements, restricting their access to banking and corporate services until compliance is restored.
The Securities and Exchange Commission of Pakistan (SECP) has declared 39,704 companies inactive after they failed to submit their mandatory annual returns and financial statements for four consecutive years.
The move is aimed at improving the reliability of Pakistan’s corporate registry and preventing dormant companies from being misused for illegal financial activities. According to the SECP, the affected businesses have been classified as “Inactive by Registrar” due to their prolonged failure to meet statutory filing requirements.
Inactive Companies Face Banking Restrictions
Following the regulatory action, the inactive status of these companies will be reflected in the SECP’s official database and remain accessible to banks and other relevant stakeholders.
Companies placed on the inactive list will face restrictions on opening new bank accounts until they submit their outstanding documents and restore their active status with the regulator. They will also be unable to access certain financial services or make changes to their directors’ records.
The SECP said the action covers companies operating across several cities in Pakistan. Lahore recorded the highest number, with 13,927 inactive businesses, followed by Islamabad with 13,859 and Karachi with 4,868.
Other affected companies include 2,031 in Peshawar, 1,861 in Multan, 1,384 in Faisalabad, 1,102 in Gilgit, 436 in Quetta and 236 in Sukkur.
SECP Highlights Importance of Corporate Compliance
Under the Companies Act, 2017, registered businesses are legally required to submit annual returns and financial statements wherever applicable. These filings help maintain accurate public records about companies, including their ownership structures and management details.
The regulator warned that prolonged non-compliance weakens the corporate registry and can create opportunities for money laundering and terrorist financing. It also stressed that maintaining updated company information is essential for transparency and accountability.
Pakistan’s Corporate Sector Continues to Expand
Despite the regulatory action, Pakistan’s corporate sector continues to record growth. The country had 317,002 registered companies by the end of September 2026.
During the previous financial year, the SECP registered 43,559 new companies, reflecting a 24% increase compared with the preceding year. Nearly 99.9% of newly incorporated businesses completed their registration through digital channels.
SECP Chairman Dr. Kabir Ahmed Sidhu said maintaining a credible corporate registry was essential for strengthening confidence in the financial system while providing businesses with an opportunity to return to regulatory compliance.