ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has declared 39,704 companies inactive after they failed to submit their annual returns and/or financial statements for four consecutive years, in a move aimed at improving the reliability of Pakistan's corporate registry and preventing the misuse of dormant companies.

According to a press release issued on October 31, 2026, the companies have been marked as “Inactive by Registrar” in the SECP's system. The decision will make their inactive status visible to banks and other relevant stakeholders.

The regulatory action is intended to strengthen corporate compliance, maintain accurate company records and protect the integrity of Pakistan's financial system.


Inactive Companies Face Restrictions on Banking and Financial Services

Companies declared inactive by the SECP will face several restrictions until they submit their overdue documents and regain active status.

The affected companies will not be permitted to open new bank accounts. They will also be unable to access financial services or register changes in their directors with the SECP during their inactive status.

The SECP said the inactive status would remain in place until the companies fulfill their outstanding filing requirements and restore their active status.


Lahore and Islamabad Account for the Highest Number of Inactive Companies

The SECP's data shows that Lahore and Islamabad account for the largest number of companies declared inactive.

The regional distribution of the 39,704 inactive companies is as follows:

Lahore 13,927

Islamabad 13,859

Karachi 4,868

Peshawar 2,031

Multan 1,861

Faisalabad 1,384

Gilgit 1,102

Quetta 436

Sukkur 236

Total 39,704

Lahore recorded the highest number of inactive companies, followed closely by Islamabad. Together, the two cities account for more than two-thirds of the companies affected by the SECP's decision.


Companies Required to Comply With Companies Act 2017

Under the Companies Act, 2017, filing annual returns and financial statements, where applicable, is a legal requirement for registered companies in Pakistan.

These filings help maintain updated public records regarding companies, their ownership structures and management.

The SECP noted that prolonged failure to submit statutory documents weakens the credibility of the corporate registry. It can also hinder efforts to prevent money laundering and terrorist financing.

The latest action reflects the regulator's efforts to improve transparency and ensure that registered companies maintain their legal compliance obligations.


Pakistan's Corporate Sector Continues to Expand

Despite the action against non-compliant companies, Pakistan's corporate registry continues to grow.

According to the SECP, Pakistan had 317,002 registered companies as of the end of September 2026.

During the previous financial year, the regulator registered 43,559 new companies, representing a 24% increase compared with the preceding year.

The SECP also highlighted the digital transformation of the company registration process. Company name reservation and incorporation are now fully digital, with 99.9% of new companies being registered online.


SECP Emphasizes Corporate Registry Transparency

SECP Chairman Dr. Kabir Ahmed Sidhu said that a clean and credible registry is fundamental to building trust in the corporate sector.

He stated that the regulator is working to protect the integrity of the financial system while providing companies with a clear opportunity to return to compliance.

The declaration of 39,704 companies as inactive represents a significant step in the SECP's efforts to strengthen corporate governance, improve regulatory oversight and maintain reliable company records in Pakistan.