In this article, we have shared the Step by Step Guide to Company Registration in Pakistan. This article is for whose who wants to start a business but don’t know the process of registering a business.
Starting a business requires capital, but managing legal and financial process is quite tedious in almost every part of the world. That’s the reason there is start-up who takes care of your legal entities and registration.
Start-up for a Start-up sounds quite funny😋Sorry for the bad-joke.
After reading the title lots of questions will arise in your mind but the most common that arises in almost every individual who reads the topic is why we register a company in Pakistan.
The answer is very simple because there is very low competition, too much population, and a rapidly increasing economy.
Legal matters in Pakistan are so complicated but starting a business in Pakistan is not so difficulted if you follow all the legal matters honestly.
SECP is the department that is set up in 1999 to regulate the corporate sector and build the capital sector.
SECP stands for “security and exchange commission in Pakistan”. The primary objectives of the security and exchange commission in Pakistan (SECP) are
- Surveillance and regulation of insurance corporations.
- Surveillance and ordinance of non-banking finances and private annuities.
- Empower organizations for lodging finance
FAQs before Registering a Company in Pakistan
First of all, you may have multiple questions in mind before registering your company right?
In that case, first read this FAQs by SECP then come back later and read this article.
Common & Most Searched FAQs
Can company name be searched/checked online?
Company name can be searched/checked through SECP search facility at https://eservices.secp.gov.pk/eServices/NameSearch.
However, the result appeared therein is just an information, not confirmation of availability of name. The final decision rests with the dealing Registrar
What is the fee for company/ LLP name reservation?
Company name reservation fee Rs.500/-offline & Rs.200/- online
LLP name reservation fee Rs. 200/- offline & Rs.100/- online
How much time name is reserved in the system?
The name of company & LLP is reserved for 60 days and 30 days respectively
How many names can be proposed in single application?
Three names can be proposed in single application in the order of priority. However, fee shall be charged for one name only.
How can we reserve a company name?
Name of the company can be reserved either:
For online, fill application form, submit it to the SECP and pay the requisite
fee of Rs 200PKR
For offline, fill name reservation application INC-Form-I, attach original challan of Rs.500PKR being application fee and send the documents to SECP.
What types of companies you can register in Pakistan?
There are 3 types of companies you can register in Pakistan.
- Single-member company
- Private limited company
- Public limited company
As the name suggests the single-member company is built by a person. Before launching the company the individual has to follow some requirements.
These requirements are from the first schedule part 2 section 4 of the companies act. The requirements are down below.
- The company shall not invite the crowd to subscribe to any shares in the organization;
- It shall not enlist any share in the name of two or more persons to hold one or more shares jointly, and
- the number of partners in the organization shall is limited to one.
Private company limited:
The security and exchange commission in Pakistan demands that two or more persons can set up a private biased organization for legal objectives.
The method of the business is the same in all cases.
The requirements according to the company act are listed down below.
- An organization limits the right to transfer its claims;
- Restricts the number of its partners to fifty, not including individuals who are in the job by the organization
- Restricts any invitation to the public to subscribe for the claims or redeemable assets of the enterprise.
A public limited company is for lawful purposes, more than 3 people can set up this company. The stakeholders or the partners have to subscribe their names to the memorandum of association.
The requirements are the same as single-member companies and private label companies.
Public limited companies are of two types
Listed is the one in which the person offers their share to the public and anyone can accept.
Unlisted is the one in which a company or person doesn’t offer its shares to the public.
Capital required to register a company:
|Minimum capital required
|Time of incorporation
|Listed public member
|Unlisted public member
How to register a company in Pakistan:
There are 5 steps you should need follow if you want to register a company in Pakistan.
- Approval of company name
- Submission of documents
- Certificate of incorporation
- Deposit the share
- Registration of income and sales tax
Approval of company name:
In the first step, you need to choose the company name. Make sure that the company name is different from all other companies across the country. Also, there are some restrictions you should have to follow. For example, some words are prohibited to use as a company name.
Submission of documents:
After the approval of the company name, you have to submit some documents to the securities and exchange commission of Pakistan (SECP). The documents include an Id card if you are Pakistan national. If you are a foreigner then you need a valid passport, Registration fee slip, and some more documents. Go to the website of the Securities and Exchange Commission of Pakistan (SECP) where you find all the information about the documents.
Certificate of incorporation:
After the submission of documents, the securities and exchange commission of Pakistan (SECP) verifies them and checks their validity. National Institutional Facilitation Technologies granted a digital signature on the documents. After this SECP collected the documents from NIFT.
For the certificate the corporation, you need to give a good presentation also. After the presentation, they give you the certificate of incorporation.
SECP E-Services Portal
Complete guide for those who don’t want any hassle in offline incorporation process. Apart from that online requires almost 50% less money than offline.
For the entire incorporation process you shall be using the SECP eServices Portal.
THE INCORPORATION PROCESS
There are 5 steps of incorporating a private company in Pakistan. Do not miss anything while incorporating your business yourself.
STEP 1: Reserving a Company’s Name
Use SECP’s Company Name Search to check if your proposed name is available or not.
Use these name Reservation FAQ first to create user ID by signing up to eServices at https://eservices.secp.gov.pk/eServices/, fill application form, submit it to the SECP and pay the requisite fee of Rs 200PKR via credit card or offline in the chosen bank and pay the requisite fee of Rs 200PKR via credit card or offline in the chosen bank.
Company Name Reservation Guide by SECP – http://www.secp.gov.pk/eServices/guide/name_reserve.asp
STEP 2: Documents Required
You will need to file the following documents during the process of incorporation.
Memorandum of Association:
It is the document that governs the relationship between the company and the outside.
Check the sample Memorandum http://www.secp.gov.pk/CLD/cld_memo_article.asp
Articles of Association:
It defines the responsibilities of the directors, the kinds of business and the means by which the shareholders exert control over the Board of Directors.
Sample Article of Association http://www.secp.gov.pk/CLD/cld_memo_article.asp
Form 1, Form 21 & Form 29
FORM 1: Declaration of compliance with the requirements of the Companies Ordinance, 1984
FORM 21: Notice of situation of registered office of the company
FORM 29: Particulars of Directors and Officers including the Chief Executive, Secretary etc.
Forms Available in http://www.secp.gov.pk/forms.asp
STEP 3: Digital Signatures NIFT
It acts as a witness during the online incorporation process. You need to obtain a digital certificate from NIFT in order to digitally sign all the docs including Memorandum, Articles and other forms.
Download NIFT Application form – https://secp-live.niftetrust.com/secp/documents/CRF_SECP_NewCompany.pdf
Instruction for digital sign – https://secp-live.niftetrust.com/secp/
Contact NIFT helpline – https://fbr.niftetrust.com/
STEP 4: Incorporation Fees/Filing Fees
This step will get enable once you complete all the previous steps in eServices, there you either need to make an online payment or offline payment.
ONLNE: Credit Card, Internet Banking, Mobile Banking, ATM & Easy Paisa
OFFLINE (Bank Challan): Deposit Bank Receipt before you submit the process. You will need receipt in Step 5
Incorporation fee is decided by your share capital. You can calculate it by using Incorporation Fee Calculator.
Schedule of fees – http://www.secp.gov.pk/CLD/cld_feesch.asp
STEP 5: Certificate of Incorporation
SECP will take about 7 working days to complete the process if there is no objection & you will receive a confirmation email regarding successful incorporation of your company including the incorporation number.
Make the required correction if there’s an objection arises. You will be notified via email.
CRO will send your incorporation certificate after seven working days or you can pick it up by yourself from the concerned CRO (Company Registration Office)
Deposit of shares:
After the completion of all the above processes (company name, submission of documents, certificate of incorporation) the shareholder will have to deposit their share to the organization or the company’s bank account.
Registration of income and sales tax:
At the end, you have to give an application to the FBR (Federal bureau of revenue) for the allotment of tax numbers.
In Pakistan, you can’t register any company if you don’t have a tax number. There are some requirements you have to do for the allotment of a tax number.
- Duly filled out NTN form
- Registration proof
- Memorandum and Articles of Association
- Valid bank account number ( like NBP, HBL, UBL, etc)
- Valid duplicates of CNICs of directors.
- A business location
After the completion of all steps you can start a business in Pakistan. You can’t skip any of the above mention steps.
Because there is no shortcut to building a business in Pakistan. You have to go to all the concerned departments for the registration of Pakistan.
There are also some legal alternate ways to open a company in Pakistan.
- Branch office
- Liaison office
If you want to have a presence in Pakistan without setting up a full company then you have to go to the branch office.
The branch office shows the presence of your company.
The rules for the branch office are very strict. You cannot take part in any trading activities. Registration of branch office needs 7 weeks.
For the promotion of products in Pakistan, you can develop a liaison office, but the rules are the same as a liaison.
You can only do promotion of products no trading and commercial activities are allowed. Seven weeks are required for the registration of the liaison office.
After reading this topic you will know everything about how to register a company in Pakistan.
Just follow all the steps. These steps are about legally registering a company.
You can’t build a company in Pakistan illegally because the laws are very strict there.