Incorporating a company in Pakistan is a structured legal process overseen by the Securities and Exchange Commission of Pakistan (SECP). Whether you are a local entrepreneur or a foreign investor, this guide will walk you through every step of setting up a business legally and efficiently.

Types of Business Structures

Pakistan offers several legal structures for business registration. The most common among them is the Private Limited Company (Pvt. Ltd), ideal for SMEs due to limited liability and ease of operations. A Single Member Company (SMC) suits solo founders who want to enjoy corporate status. Public Limited Companies are for large businesses looking to raise capital from the public. Limited Liability Partnerships (LLPs) offer a mix of corporate and partnership benefits, often suitable for professionals.

Pre-Incorporation Preparation

The first step is to decide the most appropriate business structure based on your objectives. Once selected, you must choose a unique and compliant company name. This name should not be misleading or include any prohibited words such as “bank,” “trust,” or “security.”

Next, create an account on SECP’s e-Services portal(Leap). This portal is your gateway to submitting applications, uploading documents, and tracking status during the incorporation process. It simplifies what used to be a paper-heavy task.

Secp Name Search

SECP’s Name Search allows you to check the availability of your desired company name before registration. This ensures your proposed name is unique and complies with legal naming guidelines.

Reservation of Company Name

Using the SECP e-Services (Leap), submit an application for name reservation. This is done via Form-A. Once approved, your reserved name is valid for 60 days. If your desired name is rejected, you may revise and resubmit based on SECP’s feedback.

Drafting the Incorporation Documents

Prepare essential documents like the Memorandum of Association (MoA), which defines the scope of business activities, and the Articles of Association (AoA), which lays down internal governance rules. Other documents include Form II for director details, Form 21 for the official address, and Form 29 to record company officers.

You must also attach clear copies of CNICs or passports of all directors, shareholders, and officers. For SMCs, you’ll need nominee details as well.

Payment of Fee

The incorporation fee varies based on your company’s authorized capital. This can be paid online through SECP-supported platforms such as 1Link or by generating a challan form. The online method is faster and more convenient.

Filing the Incorporation Application

Once the documents are prepared and the fee is paid, you can submit the incorporation application through the SECP e-Services portal using Form-I. Ensure all information is accurate and signed forms are uploaded to avoid delays.

SECP Review and Approval

The SECP generally processes incorporation applications within 1 to 3 working days. However, this timeline can extend if objections are raised. It’s important to monitor the application status and respond promptly to any queries raised by SECP officers.

Certificate of Incorporation

Upon successful verification, the SECP will issue a Certificate of Incorporation along with a Unique Incorporation Number (UIN). This certificate formally confirms the legal existence of your company.

Post-Incorporation Compliance

With the company now registered, several post-incorporation steps follow. These include creating a company seal and letterhead with essential details like CIN, NTN, and company address. Apply for a National Tax Number (NTN) through FBR’s IRIS system.

Open a business bank account using your incorporation certificate, MoA, AoA, NTN, and CNICs. IT companies should also register with the Pakistan Software Export Board (PSEB) to avail export benefits.

If you plan to hire employees, register with institutions such as EOBI and provincial social security departments like PESSI.

Annual and Statutory Filings

All companies must file annual returns, such as Form A or Form B (for SMCs), and audited financial statements where applicable. Board resolutions must be documented for major decisions like opening bank accounts or appointing directors.

If any change occurs in directors or company officers, it must be reported via Form 29 within 15 days.

Legal Consequences for Non-Compliance

Failure to comply with SECP’s statutory requirements can lead to penalties, daily fines, or even deregistration. Therefore, maintaining up-to-date records and filing all documents on time is critical for legal standing.

Summary of Key SECP Forms

• Form A: Annual return for regular companies

• Form 19: Annual return for SMCs

• Form 9: Particulars of Director Other Officers and Nominee in case of SMC

• Form 3:  Shareholding Change