Preliminary Chapter- 04
"Financial institution" [U/s 2(24)] means an institution as defined under the Companies Act, 2017 as
follows;
Financial institution includes,
(a) a company or an institution whether established under any special enactment and operating within or
outside Pakistan which transacts the business of banking or any associated or ancillary business
through its branches;
(b) a modaraba, leasing company, investment bank, venture capital company, financing company,
housing finance company, a non-banking finance company; and
(c) such other institution or companies authorised by law to undertake any similar business, as the
federal Government may, by notification in the office Gazette, specify for the purpose;
Explanation: "It is clear that only sub-clause (c) is applicable as far as this Ordinance is concerned. The
company or an institution which transacts the business of banking or an ancillary business, a Moradabad, a
leasing company, investment bank, a non-banking finance company are separately defined in the
Ordinance, therefore, clause (a) and (b) of section 2(15A) cannot apply. The language of section 2(24) is
also clear that it only refers to those institutions that are notified for the purpose of section 2(15A)(c) of the
Companies Act, 2017 , as "financial institution".
"Finance society" [U/s 2(25)] includes a co-operative society which accepts money on deposit or
otherwise for the purposes of advancing loans or making investments in the ordinary course of business;
Explanation: This is an inclusive definition that in addition to finance societies established under the
relevant law covers all such cooperative societies that accept money on deposit or otherwise for the
purpose of advancing loans or making investment in the ordinary course of their business.
"Firm" [U/s 2(26)] "firm" means the relation between persons who have agreed to share the profits of a
business carried on by all or any of them acting for all;
Explanation: This has the meaning as defined in section 80 which is the same as contained in the
Partnership Act of 1932:
"Foreign-source income" [U/s 2(27)] An amount shall be foreign-source income to the extent to which it
is not Pakistan-source income.
Explanation: It means income as defined u/s 101(16). Section 101 has to be kept in mind to determine
whether any income is foreign-source or not. The concept of geographical source of income has been
provided in the Ordinance to distinguish between incomes accruing or arising in Pakistan or treated to be
so and those having no Pakistani connection.
"Greenfield Industrial Undertaking" [U/s 2(27A)] means –
(a) a new industrial undertaking which is –
i. setup on land which has not previously been utilized for any commercial,
industrial or manufacturing activity and is free from constraints imposed by any prior
work;
ii. built without demolishing, revamping, renovating, upgrading, remodeling or modifying
any existing structure, facility or plant;
iii. not formed by the splitting up or reconstitution of an undertaking already in
existence or by transfer of machinery, plant or building from an undertaking
established in Pakistan prior to commencement of the new business and is not part of
an expansion project;
iv. using any process or technology that has not earlier been used in Pakistan and is so
approved by the Engineering Development Board; and