If one deals with legal issues in Pakistan on their own, it might be quite difficult to establish a corporation with the Securities & Exchange Commission of Pakistan (SECP). By breaking the procedure down into manageable parts, you’ll be able to finish it quickly and have a better grasp of the underlying legal issues.
You will learn about company registration in Pakistan through this article.
Company Types You Can Register
You can register three different legal businesses in Pakistan within the constraints set out by the Companies Act of 2017:
- Individual Member Company
- Limited Liability Company
- Public limited company
Single Member Company
A single member forms a single-member corporation (SMC), as the name implies. If a business satisfies the criteria listed in the First Schedule, Part II, Section 4 of the Companies Act, it is considered an SMC. These prerequisites consist of:
The corporation is prohibited from registering any shares in the names of more than two people to hold shares jointly, inviting the public to subscribe for any shares in the company, and more.
There may only be one member of the firm at a time. Please be aware that anyone from a foreign country can open an SMC in Pakistan, with the exception of Israeli citizens.
Limited Liability Company
According to SECP regulations, a private limited company can only be established for legal reasons by two people or more. The technique of incorporation is much the same regardless of the type of business.
The following conditions must be met before a private limited company may be registered in Pakistan:
A business that restricts the ability to transfer its shares, caps the number of members at fifty (excluding those who work for the business) and forbids inviting the public to subscribe for the business’s shares, debentures, or redeemable capital.
All foreign nationals may establish a private limited corporation in Pakistan, with the exception of Israeli nationals.
Public Limited Company
In Pakistan, a public limited corporation may be established by three or more people for legal purposes. As with private and single limited businesses, the partners must sign a Memorandum of Association, and the public limited company must adhere to the Companies Act’s regulations.
The fact that such a corporation is organized for the general public and that its shares are issued with limited liability is one thing to bear in mind. These shares can be purchased on the stock market or through a public offering.
Public limited businesses can be registered in Pakistan as either listed or unlisted entities. The distinction between the two is that the former makes its portion of the public available for purchase.
An unlisted firm, on the other hand, does not sell shares to the general public.
How Can I Set Up A Business In Pakistan?
Let’s examine the procedure for forming a corporation now that we are aware of the many business entities that qualify.
Registering A Company Name
The company name must be registered as a preliminary step. Before choosing a business name, you should review section 10 of the Companies Act of 2017 since it contains a list of words that are not allowed.
Once you’ve chosen a distinctive name for your business or organization, you may register for an online account with SECP and see if the name is still available. If it’s available, you can reserve it for your business by taking the next actions:
Visit The SECP Website And Sign Up For E-Services.
Foreign nationals require a valid passport, whereas Pakistani citizens require a valid CNIC. For same-day registration services, choose “Fast Track Registration Services (FTRS)”.
- Firstly, fill out the online form with the necessary data, then submit it.
- Secondly, depending on your preference, the system will automatically send you a code by phone or by email.
- Thirdly, after you have confirmed the security code, the system will generate a PIN.
- Moving forward, the system will produce a challan form. Furthermore, you can deposit this form in certain MCB or UBL branches (or the fee can be deposited online via your credit or debit card).
If the company name does not include any forbidden words, you will get a confirmation that the name has been reserved on your credentials within a day. However, if the site is down for whatever reason, SECP also provides offline services. Thus, allowing users to submit an application with three potential business names to the registrar’s office.
The offline procedure takes 3 to 5 days to complete, following which the applicant will be granted permission to incorporate their business under the authorized name in official papers.
Registration Of A Company
The officials will need the following paperwork to register a corporation in Pakistan:
- Association Bylaws (rules and regulations that govern the company) and an Association Memorandum (contains information for company incorporation)
- copies of the CNIC for the directors, CEO, nominee, or, in the case of overseas persons, a copy of the passport
- A NOC or letter of intent from the relevant government is required if you want to start a specialized business. Moreover, you must provide a Memorandum of Association and Articles of Association, a certified copy of the company’s charter. Additionally, you also have to provide information on the directors’ nationalities, the business profile, and these documents if you want to set up a foreign company incorporation.
- The consent of subscribers to the submission of papers
- Admission receipt
Moreover, if the nominal capital is less than Rs. 100,000, the company incorporation charge for online submission is Rs. 1800. You will have to pay Rs. 3500 if you file the business incorporation offline or in person.
The requirements and procedure for registering a company in Pakistan are available for your knowledge.
Registering A Company To The Income And Sales Tax Register
If you do not have a National Tax Number, you cannot form a corporation in Pakistan (NTN). At the Regional Tax Office of the Federal Bureau of Revenue, you have to submit an NTN application. The documents you’ll need to apply for an NTN number are listed below:
- properly completed NTN form
- registration documentation
- Association Memorandum and Articles
- Valid banking information
- copies of directors’ current CNICs
- a place of business
You will submit the papers to SECP after gathering all the necessary paperwork and paying the necessary costs. SECP will review the information and then provide the necessary permission. The National Institution of Facilitation Center (NIFC) will also create and provide the firm with a seal at the same time.
You will be given a Certificate of Incorporation, which is a formal and legal authorization to start a business in Pakistan after SECP has reviewed and accepted your documentation. The sum corresponding to each shareholder’s shares must be sent to the business’s bank account.
The entire procedure has been substantially simplified by SECP, and the ability to submit a registration fee online is a significant advance as Pakistani business registration may now be completed entirely online.
We hope this article has given you a good understanding of how to register a corporation in Pakistan.