This brief overview describes, in very general terms, the procedure and requirements for registration of a company in Pakistan. These fleeting notes are for general guidance only and should not be taken as a substitute for in-depth and professional legal advice. The procedure of Company registration in Pakistan is not much difficult as compared to company registration in some of the other countries of the world nevertheless in order to effectively go through the procedure of company registration in Pakistan you have to follow few basic steps that are stated below.
Before jumping to those particular steps of company registration in Pakistan it is pretty important for you to comprehend that in Pakistan firms are registered with Securities and Exchange Commission of Pakistan (SECP) which is the only frame granted the powers of company registration in Pakistan by the Government of Pakistan.
Types and Forms of Companies which may be Registered in Pakistan
The following types of companies may be registered in Pakistan:
- A private limited company, which may be a single member company
- A public limited company, which may be listed or unlisted
- A foreign company
How to Register a Company in Pakistan?
Companies remain the most favored form of business organizations in Pakistan especially for medium and large-scale business enterprises. Legal regime for establishment and regulation of companies in Pakistan is given in the Companies Ordinance, 1984. This ordinance clearly says:
“A company is a corporate body with separate legal entity and a perpetual succession. A company may be formed by persons associating for any lawful purpose by subscribing their names to the Memorandum and Articles of Association and complying with other requirements for registration of a company under the provisions of the Ordinance.”
Whereas the purpose of administration of these companies is conferred in the Securities and Exchange Commission of Pakistan and the Registrar of Companies prearranged by the Securities and Exchange Commission of Pakistan for a Province of Pakistan where such company is to be registered.
The Companies Ordinance, 1984 provides three different types of companies:
- A company limited by shares
- A company limited by guarantee
- An unlimited liability company
Further, following the Companies Ordinance, 1984 two types of limited liability companies are provided namely, (a) a private limited company and (b) a public limited company (which may be listed or unlisted). Any one or more persons related for any lawful purpose by subscribing their name(s) to the Memorandum of Association and fulfilling with other registration explicit requirements of the Companies Ordinance, 1984 may integrate a private limited company. Provided that where a company has only one subscriber to the Memorandum of Association then such a company is called a Single Member Company, however, a Single Member Company remains a private limited company for all intents and purposes of the Ordinance. Whereas any three or more persons so associated may form a public limited company. A company limited by shares whether a private company or a public company is the most common vehicle for carrying out a business enterprise in Pakistan.
Preceding approval of the related or relevant Ministries/Departments is obligatory to be attained before integration of the following companies:
- A banking company
- A non-banking finance company
- A security service providing company
- A corporate brokerage house
- A money exchange company
- An Association not for profit u/s42 of the Companies Ordinance, 1984
Procedure for Registration of a Company in Pakistan
Following are the requirements for registration of a company in Pakistan:
1. Availability of Name
The first step with regard to incorporation of a company is to seek availability of the proposed name for the company from the Registrar, keeping in mind that rules are not being violated. Check properly the words you are going to use for your company name, they shouldn’t be offensive, deceptive or similar to the existing company. Because while scrutinizing, such inappropriate words would be objected. For this purpose, an application is to be made and a fee of Rs.200 is required to be paid for seeking name availability certificate.
2. Preparation of Documents
The second step in company registration in Pakistan is to start preparing documents necessary for the process of company registration. The following are the set of documents need to be prepared in order to successfully complete the process of company registration in Pakistan:
Memorandum of Association
Memorandum of Association is the basic document where all the objectives of the company registration are stated e.g. the basic objective of company registration is to engage in the business of general order supplier or trading company or any other business. All the business the company is planning to undertake must be stated in the memorandum in order to get the process of company registration in Pakistan to complete. Four copies of Memorandum of Association must be prepared for company registration in Pakistan.
Articles of Association
Articles of Association is the basic document where all the rules of the company to operate are stated e.g. How directors are going to operate, when how General Meetings of the company undergoing the process of company registration in Pakistan is to be conducted etc. Four copies of Articles of Association must be prepared also.
Form I for company registration is the basically a declaration of one of the directors of the company about to be registered. Form 1 can be downloaded from Securities and Exchange Commission of Pakistan website. This is another compulsory component of company registration process in Pakistan.
Form 21 is the form whereby the address of company undergoing the process of company registration in Pakistan is notified to the registrar.
Form 29 contains information about the particulars of the directors of the company that is undergoing the process of company registration in Pakistan. Form 29 is submitted in duplicate.
Power of Attorney
Power of Attorney in favor of any person authorized to submit documents and liaison with the company registration office about different issues during company registration in Pakistan.
Copies of CNIC’s of Directors
Copies of CNIC are of Directors and witness who signed the memorandum and articles of Association of the company that is undergoing the process of company registration in Pakistan.
Name Availability Letter/Email Original from SECP
Letter receives from the Securities and Exchange Commission of Pakistan confirming the name applied for the company that is undergoing the process of company registration in Pakistan.
3. Pay the fees for incorporation and Register your company
A name availability certificate is required from SECP and for the purpose the applicants have to file an application for incorporation. The fees for which could be paid using any bank challans at designated Muslim Commercial Banks (MCB). After this, you come to a level of registration where the SECP ask you to submit the following documents:
a.Declaration of compliance
b.Identification of office’s location
c.Particulars of directors, secretary, chief accountant, auditors and other
d.Copies of the Memorandum and Articles of Association with each member’s signature
4. Get Digital Signature and Make a Company Seal
The signature is obtained by National Institutional Facilitation Technologies (NIFT) and can be granted with the use of E-services of SECP. After the certificate of incorporation is issued, you may be needing to provide a company seal, which depends on the area/city in which you are going to start your business. On the essential point, it wouldn’t be inappropriate to state that some areas require a corporation to have a corporate seal, which is also sometimes referred as company seal.
5. Register for Income, Sales and Professional Taxes
You need to to apply for a National Tax Number (NTN) for registration of income tax, at the tax facilitation of the Regional Tax Office (RTO) of the Federal Board of Revenue (FBR). Following are the required things for this application.
b.Memorandum and Articles of association
c.Bank account number
d.Copies of National Identity Cards (NICs) of companies’ Directors
e.An attestation of business address
f.Proof of registration
Just like Income tax, Sales tax can also be registered by applying for a Sales Tax Number (STN) at the tax facilitation department of the Regional Tax Office (RTO) of the Federal Board of Revenue (FBR). For the professional tax, provided it applies, the firm will be essentially needing to register with Exercise and Taxation (ET) Department of the District.
6. Register with ESSI and EOBI
Considering the on the location of the business, the company will be needing to register with
- Punjab Employees Social Security Institutions (PESSI)
- Sindh Employees Social Security Institution (SESSI)
- Likewise (BESSI) or (KPKESSI) for Balochistan and Khyber Pakhtunkhwa respectively.
Following the the Employees Old Age Benefits Institution (EOBI), insured employees are given a pension after their retirement, invalidity in the case of disability, old-age grant and survivor’s pension. Every industry or a commercial development with five or more employees has to be registered with the Federal Employees Old age Benefits Institution (EOBI).
7. Register with the Labor Department of the District
In order to protect the labor standard of the employees, all firms other than the single entity are needed to registration with the District Chief Inspector of the labor department in each district. For registration, employer must submit the application form A accompanied with the relevant bank form. Once these requirements are fulfilled and granted by SECP, the firm is then ready to be an independent functioning body in Pakistan.
Following Are The Relevant laws of Pakistan for Registration of a Company in Pakistan:
- Companies Ordinance, 1984
- Companies (General Provisions and Forms) Rules, 1985
- Single Member Companies Rules, 2003
- Schedule filing fees
If you have any question or want to add something into this post, please write to us in comments section. We hope this guide will help you to get the company registered successfully in Pakistan.