Lahore High Court: In order to facilitate the effective and expeditious adjudication of disputes arising under Section 126 of the Companies Act, 2017 (the Act), relating to the omission of a person’s name from, or the wrongful entry of a person’s name in, the Register of Members of a company, Jawad Hassan, J., observed that recurring questions concerning membership records, changes in shareholding, and the evidentiary value of filings made with the Securities and Exchange Commission of Pakistan (SECP) necessitate a clear understanding of the statutory framework governing such matters. Accordingly, the Court directed the Prosecutor for the SECP to submit a comprehensive report setting out the legal framework governing membership records, changes in shareholding, and the rectification of the Register of Members under the Act.
In the present case, Prosecutor for the SECP, is directed to submit a comprehensive report, in tabulated form, explaining the statutory framework governing the creation, maintenance, alteration and rectification of membership records of a company incorporated under Part IV of the Act.
The report shall specifically set out:
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the original subscribers to the Memorandum and Articles of Association and the shareholding held by each at the time of incorporation;
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the records relating to membership and shareholding maintained by the company and by the SECP;
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the forms and documents through which membership and shareholding information is reported to the SECP;
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the procedure prescribed under the Act for allotment, transfer, transmission, or any other change in share ownership, along with the relevant forms; and
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the manner in which subsequent changes in membership are recorded in the company’s records and reflected in the records maintained by the SECP.
The report shall also explain the legal framework governing membership records of companies.
The Court stated that the aforesaid exercise is necessary as several petitions relating to rectification of the Register of Members are pending before this Court, raising recurring questions regarding the effect of inclusion or omission of names in the Register of Members, the evidentiary value of filings made with the SECP, and the manner in which membership rights are acquired, transferred, or extinguished. As shares constitute movable property under the Act, clarity on these issues would assist the Court in the adjudication of such matters.
The Court stated that the shares are movable property, and their allotment, transfer, and transmission are governed by the Act through prescribed procedures and instruments. Any change in shareholding is required to be reflected in the relevant corporate records in accordance with law.
Section 126 of the Act empowers this Court to order rectification of the Register of Members where any entry or omission has been made without sufficient cause or otherwise contrary to law. To assist the Court in the present and similar matters, the SECP shall, wherever relevant, also identify:
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the chronology of events relating to the disputed shares;
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the documents and statutory forms on the basis of which the entry, omission, transfer, transmission, or acquisition of shares is claimed;
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whether the transaction was reported to or recorded by the SECP;
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whether it was reflected in the Register of Members maintained by the company; and
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the legal instrument relied upon in support of the transaction, including any share transfer deed, share purchase agreement, allotment document, succession instrument, or other relevant document.
The Court stated that the aforesaid report shall be filed on or before the next date of hearing, so that a consistent and legally sound framework might be evolved for the expeditious disposal of matters involving rectification of the Register of Members under Section 126 of the Act.
The matter is next listed on 23-6-2026.
[Shabbir Ahmed Malik v. Business Two Thousands (P) Ltd., C.O.No. 08 of 2022, decided on 16-6-2026]
Advocates who appeared in this case:
For the Petitioners: Barrister Hassan Qadir Khan, Advocate; Haseeb Shakoor Paracha, Advocate.
For the Respondents: Hafiz Muhammad Mudassir, Advocate; Boo Ali Khan, Prosecutor.
