SECP Declares 39,704 Companies Inactive, Freezes Bank Accounts Over Filing Violations

• SECP has classified 39,704 companies as “Inactive by Registrar” for failing to submit annual returns or financial statements for four consecutive years.
• Affected companies face restrictions on banking services, including frozen existing accounts and a prohibition on opening new accounts until compliance is restored.
• Pakistan’s corporate registry reached 317,002 companies by September 2026, with 43,559 new businesses registered during the previous financial year.

The Securities and Exchange Commission of Pakistan (SECP) has declared 39,704 companies inactive after they failed to meet mandatory filing requirements for four consecutive years, introducing restrictions on their banking operations and access to financial services.

The regulatory action targets companies that have not submitted annual returns, financial statements or both for an extended period. These businesses have been assigned the status of “Inactive by Registrar” in the SECP’s corporate registration system.

According to the commission, the measure is intended to improve the accuracy and credibility of Pakistan’s corporate registry while reducing the risk of dormant or non-compliant companies being used for unlawful financial activities.

Under the new classification, the inactive status of affected companies will be reflected in SECP records and made accessible to banks, financial institutions and other relevant stakeholders.

Companies placed in this category will not be permitted to open new bank accounts, while their existing accounts will remain frozen until they submit outstanding documents and regain active status.

The restrictions will also prevent these businesses from accessing certain financial services or registering changes to their boards of directors.

To restore normal operations, affected companies must complete their overdue statutory filings with the SECP and fulfil the requirements necessary to have their active status reinstated.

The regulatory action covers companies registered across several major cities and regional offices, with Lahore and Islamabad accounting for the largest numbers of inactive businesses.

Lahore has the highest number of affected companies at 13,927, followed closely by Islamabad with 13,859. Karachi accounts for 4,868 companies, while 2,031 businesses have been identified in Peshawar.

In Multan, 1,861 companies have been classified as inactive, compared with 1,384 in Faisalabad and 1,102 in Gilgit. The remaining cases include 436 companies in Quetta and 236 in Sukkur.

The SECP explained that submitting annual returns and applicable financial statements is a legal obligation under the Companies Act, 2017.

These documents provide updated information about a company’s ownership structure, directors, management and financial position, helping regulators and stakeholders maintain accurate corporate records.

The commission warned that prolonged failure to submit statutory filings undermines the reliability of the corporate registry and creates opportunities for the misuse of companies that are no longer conducting regular business activities.

Such gaps in regulatory information can also complicate efforts to detect and prevent money laundering, terrorist financing and other financial crimes.

By identifying companies that have remained non-compliant for several years, the SECP aims to strengthen corporate transparency and ensure that financial institutions have reliable information about the legal and operational status of registered businesses.

The enforcement measure comes as Pakistan continues to experience growth in company registrations, supported by the expansion of digital incorporation services.

According to the SECP, the total number of registered companies in Pakistan reached 317,002 by the end of September 2026.

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

The SECP attributed part of the improvement in registration efficiency to the digitisation of corporate services, which has simplified the process of establishing new businesses.

Company name reservation and incorporation procedures are now fully digital, with 99.9 percent of newly registered companies completing the registration process online.

The digital system allows entrepreneurs and investors to establish companies without relying on traditional paper-based procedures, reducing administrative delays and improving accessibility.

Commenting on the decision, SECP Chairman Dr. Kabir Ahmed Sidhu emphasised the importance of maintaining an accurate and trustworthy corporate registry.

He said a credible registry was essential for building confidence in the corporate sector and protecting the integrity of Pakistan’s financial system.

The chairman maintained that the commission’s action was designed not only to strengthen regulatory oversight but also to provide non-compliant companies with an opportunity to fulfil their legal obligations and restore their active status.

The SECP has made clear that affected businesses can regain access to banking and other restricted services once they complete the required filings and their status is restored in the corporate registration system.