When starting a business in Pakistan, one of the most important decisions is choosing between a Private Limited Company and a Public Limited Company. Both are regulated by the Securities and Exchange Commission of Pakistan (SECP) under the Companies Act, 2017, and offer limited liability and corporate legal structure. However, they differ significantly in terms of registration procedures, ownership, compliance requirements, capital-raising abilities, and disclosure standards. This article provides a complete comparison between private and public company registration in Pakistan to help entrepreneurs, investors, and corporations choose the right business structure.
1. Definitions
Private Limited Company (Pvt. Ltd.)
A company that restricts the right to transfer its shares and limits the number of its members to 50. It cannot invite the general public to subscribe to its shares or debentures.
Public Limited Company (Ltd.)
A company that may offer its shares to the public and is not subject to the same restrictions as a private company. It can be listed or unlisted on the Pakistan Stock Exchange (PSX).
2. Governing Law
Both types of companies are governed by:
-
Companies Act, 2017
-
SECP Rules and Regulations
-
For listed public companies: PSX Listing Regulations
3. Minimum Number of Members and Directors
| Company Type | Minimum Shareholders | Minimum Directors |
|---|---|---|
| Private Limited | 2 | 2 |
| Public Limited | 7 | 3 |
| Listed Public Company | 7 | 7 (including 1 female director) |
4. Maximum Number of Members
| Company Type | Maximum Members |
|---|---|
| Private Limited | 50 |
| Public Limited | No limit |
5. Share Transferability
| Feature | Private Limited | Public Limited |
|---|---|---|
| Share Transfer | Restricted by AOA | Freely transferable |
| Regulatory Approval | Not required | May need SECP/PSX approval |
| Public Offering | Not allowed | Allowed (after SECP/PSX clearance) |
6. Capital Raising
Private Limited Company:
Can raise capital only through private arrangements, such as:
-
Shareholders’ contributions
-
Private investors
-
Venture capitalists
Public Limited Company:
Can raise capital from the general public through:
-
Initial Public Offering (IPO)
-
Rights issues
-
Listing on Pakistan Stock Exchange (PSX)
7. Registration Process
Private Limited Company Registration Steps:
-
Name reservation via SECP eServices
-
Preparation of MOA and AOA
-
Submission of Form-I, Form-21, and Form-29
-
Payment of SECP incorporation fee
-
Issuance of Certificate of Incorporation
-
Post-registration: NTN, bank account, tax registration
Public Limited Company Registration Steps:
-
Same initial steps as Private Limited
-
Additional requirements:
-
Minimum 3 directors
-
Public Prospectus or Statement in lieu of prospectus (if raising public funds)
-
Appoint legal advisor and auditor
-
File capital subscription proof
-
-
Apply for IPO (for listed companies) with SECP and PSX
-
SECP issues Certificate of Incorporation after review
8. Regulatory Compliance
| Compliance Requirement | Private Limited | Public Limited |
|---|---|---|
| Annual Return (Form A) | Required | Required |
| Statutory Audit | Mandatory | Mandatory |
| Board Meetings | As per AOA | Minimum four per year |
| Appointment of Company Secretary | Optional | Mandatory |
| Submission to SECP | Standard | Detailed and frequent |
| PSX and Investor Reporting | Not applicable | Mandatory for listed company |
9. Audit and Disclosure Requirements
Private Company:
-
Audited accounts mandatory only if capital exceeds prescribed limits or is a holding/subsidiary company
-
Limited public disclosure
Public Company:
-
Mandatory audit regardless of size
-
Annual financial statements must be published
-
Adherence to corporate governance code
-
Listed companies must follow PSX listing regulations
10. Naming Requirements
| Company Type | Naming Suffix Requirement |
|---|---|
| Private Company | “(Private) Limited” or “(Pvt) Ltd” |
| Public Company | “Limited” or “Ltd” |
Names must be approved by SECP and follow naming guidelines (no prohibited/restricted words).
11. Statutory Filings with SECP
| Form | Private Limited | Public Limited |
|---|---|---|
| Form-I (Compliance) | ✔ | ✔ |
| Form-21 (Address) | ✔ | ✔ |
| Form-29 (Officers) | ✔ | ✔ |
| Form-A (Annual Return) | ✔ | ✔ |
| Form 45 (Prospectus) | ✘ | ✔ |
| Form 3 (Share Allotment) | ✔ | ✔ |
12. Advantages and Disadvantages
| Criteria | Private Company | Public Company |
|---|---|---|
| Ease of Registration | Simple and fast | Time-consuming and complex |
| Funding Options | Limited to private investors | Can raise capital publicly |
| Cost of Compliance | Lower | Higher |
| Credibility | Moderate | High (especially if listed) |
| Decision Making | Quicker (fewer stakeholders) | Slower due to shareholder approvals |
| Public Investment | Not allowed | Allowed |
| Regulatory Oversight | Moderate | Very High (SECP, PSX, SBP oversight) |
13. Cost Comparison
| Stage | Private Limited (PKR) | Public Limited (PKR) |
|---|---|---|
| Name Reservation | 200–1,000 | 200–1,000 |
| Incorporation Fee | 1,500–25,000 | 5,000–50,000+ |
| Legal & Professional Fees | 10,000–30,000 | 30,000–100,000+ |
| Auditor/Legal Advisor | Optional | Mandatory |
| IPO/Listing Fee | Not applicable | Variable (high) |
14. Taxation
Both types of companies are subject to the same corporate tax rate:
-
29% Corporate Tax (FY 2025)
-
Minimum Tax on Turnover if no profit declared
-
Withholding tax and sales tax compliance required
-
Listed companies may get favorable rates under tax treaties and investment incentives
15. Conversion Between Private and Public Company
Private to Public:
-
Requires passing a special resolution
-
Alteration of MOA and AOA
-
Filing with SECP
-
Change of suffix from “Pvt Ltd” to “Ltd”
Public to Private:
-
Requires SECP approval
-
Shareholder resolution
-
Amendments to constitutional documents
16. When to Choose Which Structure
| You should choose… | If you… |
|---|---|
| Private Limited Company | Want to keep control among few people, raise private capital, reduce compliance load |
| Public Limited Company | Want to raise public capital, increase credibility, or plan for listing on PSX |
17. How Sterling.pk Can Help
At Sterling.pk, we specialize in all aspects of company formation and compliance in Pakistan. Our services include:
-
Company registration (Pvt Ltd & Public Ltd)
-
SECP name reservation and document filing
-
MOA/AOA drafting
-
FBR, PRA/SRB/KPRA registration
-
IPO and listing support
-
Corporate compliance and governance advisory
-
Post-registration filings, Form-A, Form 29, audit support
Whether you’re launching a startup or preparing for public fundraising, Sterling.pk ensures your business is registered right and stays compliant.
Conclusion
Understanding the differences between private and public company registration in Pakistan is essential for choosing the right legal structure for your business. While Private Limited Companies offer quick setup and flexibility, Public Limited Companies enable broader capital access and investor confidence. The choice depends on your company’s vision, size, funding goals, and regulatory capacity.
