KARACHI – Pakistan’s corporate sector comes under regulatory crackdown as Securities and Exchange Commission of Pakistan (SECP) declared 39,704 companies inactive for failing to submit mandatory financial records for four consecutive years. The sweeping action has placed thousands of businesses under financial restrictions, with Lahore and Islamabad accounting for nearly 70% of the affected companies.
The decision follows prolonged non-compliance by companies that failed to file annual returns, financial statements or both, as required under the Companies Act, 2017. The regulator classified these businesses as “Inactive by Registrar,” raising concerns over their financial operations and future business activities.
The action is part of a broader effort to clean up Pakistan’s corporate register, strengthen financial transparency and prevent dormant companies from being exploited for illegal financial activities.
Thousands of companies could now face serious difficulties in carrying out financial transactions after being placed on the inactive register. Under the restrictions, affected businesses will be unable to open new bank accounts, access certain financial services or register changes in their directors until they fulfil their outstanding regulatory obligations.
Reports have also indicated that existing bank accounts of inactive companies will remain frozen, adding further pressure on businesses that have failed to maintain their statutory records. However, the action does not mean that all 39,704 companies have been permanently shut down. They can regain active status by completing overdue filings and meeting the SECP’s legal requirements.
The city-wise figures reveal that Pakistan’s two major corporate registration centres account for the largest share of inactive businesses. Lahore leads with 13,927 companies, closely followed by Islamabad with 13,859, while Karachi stands third with 4,868 companies.
Complete City-Wise List
| City | Inactive Companies |
|---|---|
| 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 |
The crackdown goes beyond missed deadlines and incomplete paperwork. Companies that remain registered without submitting financial statements or annual returns for years can create serious gaps in corporate oversight, making it difficult for regulators and financial institutions to verify their ownership, management and financial activities.
Such companies may also become vulnerable to misuse for money laundering, terrorist financing and other illegal financial transactions. By identifying long-term non-compliant businesses, the SECP aims to ensure that Pakistan’s corporate register reflects a more accurate picture of companies genuinely operating in the country.
SECP Chairman Dr Kabir Ahmed Sidhu has emphasised the importance of maintaining a credible and transparent corporate system to protect investors, financial institutions and the wider economy. The regulator also made it clear that companies willing to fulfil their outstanding obligations will have an opportunity to restore their active status.
The action comes as Pakistan continues to witness significant growth in company registrations. Official figures show that 317,002 companies were registered with the SECP by the end of September 2026, highlighting the expanding size of the country’s formal corporate sector.
Meanwhile, Pakistan recorded 43,559 new company registrations during the previous financial year, reflecting a 24% increase compared with the preceding year.
The registration process has also become almost entirely digital, with approximately 99.9% of new companies incorporated online.
Despite the restrictions, affected businesses still have a route to regain their active standing. Companies must submit their outstanding annual returns, applicable financial statements and other required documents under the Companies Act, 2017.
Once the SECP’s compliance requirements are fulfilled and their active status is restored, businesses can seek the removal of restrictions associated with their inactive classification.
