Registering a business in Pakistan can be a time-consuming process. However, the time required can vary depending on several factors such as the type of business entity, the location, the nature of the business, and the extent of legal compliance requirements. In this article, we will explore the process of business registration in Pakistan, the types of business entities that can be registered, and the estimated time required for registration.
Business Registration Process in Pakistan
The business registration process in Pakistan is governed by the Companies Act 2017 and the Securities and Exchange Commission of Pakistan (SECP). The process involves several steps and requires the submission of various documents and fees.
Step 1: Obtain a Digital Signature Certificate (DSC)
The first step in the business registration process is to obtain a Digital Signature Certificate (DSC). A DSC is a secure digital key that is issued by a certifying authority and is used to sign electronic documents. The SECP has authorized three certifying authorities in Pakistan to issue DSCs. These are the National Institutional Facilitation Technologies (NIFT), the Pakistan Revenue Automation Private Limited (PRAL), and the TCS Private Limited.
Step 2: Reserve a Company Name
Once you have obtained a DSC, the next step is to reserve a name for your company. You can check the availability of your desired company name on the SECP website. Once you have selected a name, you need to file an application for name reservation with the SECP. The application fee for name reservation is PKR 1,000. The SECP usually takes one working day to approve the name.
Step 3: Prepare and File Documents
After the name reservation is approved, the next step is to prepare and file the necessary documents for registration. The documents required for registration depend on the type of company you want to register. The most common types of companies in Pakistan are:
- Private Limited Company
- Single Member Company
- Public Limited Company
- Limited Liability Partnership
- Sole Proprietorship
We will discuss each type of company in more detail below.
Private Limited Company
A private limited company is the most popular form of business entity in Pakistan. It is a separate legal entity from its shareholders and has a limited liability. To register a private limited company in Pakistan, you need to file the following documents with the SECP:
- Memorandum of Association
- Articles of Association
- Form A (Declaration of compliance with the Companies Act 2017)
- Form 21 (Notice of situation of registered office of the company)
The registration fee for a private limited company is PKR 4,000. The SECP usually takes four working days to approve the registration.
Single Member Company
A single member company is a type of private limited company that has only one shareholder. To register a single member company in Pakistan, you need to file the same documents as a private limited company. The registration fee is also the same, and the SECP takes four working days to approve the registration.
Public Limited Company
A public limited company is a company that can offer its shares to the public. To register a public limited company in Pakistan, you need to file the following documents with the SECP:
- Memorandum of Association
- Articles of Association
- Form A (Declaration of compliance with the Companies Act 2017)
- Form 27 (Consent to act as director)
- Form 28 (Consent to act as chief executive or director)
- Form 29 (Particulars of directors, chief executive, and officers of the company)
- Form 21 (Notice of situation of registered office of the company)
The registration fee for a public limited company is PKR 12,000. The SECP usually takes five working days to approve the registration.
Limited Liability Partnership (LLP)
A limited liability partnership is a type of partnership in which the partners have limited liability. To register an LLP in Pakistan, you need to file the following documents with the SECP:
- Partnership deed
- Form 1 (Statement of partners)
- Form 21 (Notice of situation of registered office of the LLP)
The registration fee for an LLP is PKR 10,000. The SECP usually takes four working days to approve the registration.
Sole Proprietorship
A sole proprietorship is a type of business entity in which the owner and the business are the same. To register a sole proprietorship in Pakistan, you need to file the following documents with the SECP:
- National Tax Number (NTN) certificate
- Sales tax registration certificate
- Professional tax registration certificate
- Copy of CNIC
- Form A (Declaration of compliance with the Companies Act 2017)
- Form 21 (Notice of situation of business)
The registration fee for a sole proprietorship is PKR 1,000. The SECP usually takes one working day to approve the registration.
Step 4: Obtain Other Registrations
Once your business is registered with the SECP, you may need to obtain other registrations depending on the nature of your business. For example, if you want to import or export goods, you need to obtain an Import Export License from the Trade Development Authority of Pakistan (TDAP). If you want to operate a factory, you need to obtain a Factory License from the Department of Industries.
Time Required for Business Registration in Pakistan
The time required for business registration in Pakistan can vary depending on several factors such as the type of business entity, the location, the nature of the business, and the extent of legal compliance requirements. The following table provides an estimated time required for registration of each type of business entity:
Type of Business Entity Estimated Time Required
Private Limited Company 5-7 working days
Single Member Company 5-7 working days
Public Limited Company 7-10 working days
Limited Liability Partnership (LLP) 5-7 working days
Sole Proprietorship 2-3 working days
It is important to note that the above estimates are subject to change and may vary depending on the specific circumstances of each case.
Conclusion
Registering a business in Pakistan can be a time-consuming process. However, the process is straightforward and can be completed within a reasonable time frame if all the necessary documents are prepared and filed correctly. It is important to ensure compliance with all legal requirements and obtain any necessary registrations before commencing business operations.