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How to close a registered business in Pakistan

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Closing a registered business in Pakistan involves a structured legal process to formally wind up operations, settle liabilities, and remove the entity from government records. Whether the business is a sole proprietorship, partnership, private limited company, or public company, the procedure varies depending on the business structure, the reason for closure, and applicable laws. Ensuring that all regulatory requirements are met during business closure protects the owners from future legal liabilities, tax penalties, or compliance issues.

This comprehensive guide explains the procedures, documents, and authorities involved in closing different types of registered businesses in Pakistan.

Reasons for Closing a Business

There are several valid reasons why business owners may decide to shut down operations:

  • Long-term losses or unprofitability

  • Disputes between partners or shareholders

  • Retirement or death of key stakeholders

  • Completion of a specific project or purpose

  • Strategic merger or acquisition

  • Shifting to a different line of business

  • Regulatory or legal constraints

Regardless of the reason, proper closure procedures must be followed to legally dissolve the entity and inform the relevant authorities.

Authorities Involved in Business Closure

The process of closing a business in Pakistan may involve one or more of the following authorities depending on the business structure:

  • Securities and Exchange Commission of Pakistan (SECP)

  • Federal Board of Revenue (FBR)

  • Provincial Registrar of Firms

  • Employees Old-Age Benefits Institution (EOBI)

  • Punjab Revenue Authority (PRA) or Sindh Revenue Board (SRB)

  • Chamber of Commerce or Professional Regulatory Bodies

Each of these departments must be informed and cleared for the business to be officially closed.

Closing a Sole Proprietorship

Sole proprietorships are the simplest to close as they are not incorporated under SECP. However, if the business was registered with FBR, local chamber, or trade bodies, those authorities need to be notified.

Step-by-Step Process

  1. Clear All Dues and Liabilities
    Settle all outstanding tax payments, employee dues, and vendor liabilities.

  2. Close Business Bank Account
    Ensure the account is closed after clearing all transactions.

  3. Cancel NTN and STRN with FBR
    Log in to the IRIS portal and file an application for business cessation. Provide:

  • CNIC

  • NTN Certificate

  • Closure Letter

  • Bank closure certificate

  1. Inform Local Authorities
    Submit an application to the Chamber of Commerce or Trade License authority if applicable.

  2. Retain Closure Documents
    Keep evidence of cancellation and closure letters for audit or legal purposes.

The whole process may take 7 to 10 working days depending on the FBR’s responsiveness.

Closing a Partnership Firm

Registered partnership firms fall under the Partnership Act, 1932 and are governed by the Registrar of Firms in respective provinces.

Step-by-Step Process

  1. Dissolution by Mutual Consent
    Partners draft a Dissolution Deed signed by all parties.

  2. Clear Business Liabilities
    Pay all dues, taxes, loans, and settle employee payments.

  3. File Dissolution Notice with Registrar of Firms
    Submit:

  • Copy of Dissolution Deed

  • Form V (Notice of Dissolution)

  • Original Registration Certificate

  • Affidavit from all partners

  1. Cancel FBR NTN
    Submit closure application on IRIS portal with partnership NTN and CNICs.

  2. Notify PRA/SRB (if registered)
    For firms registered for sales tax or services tax, apply for de-registration.

  3. Close Bank Accounts
    Submit dissolution documents to the bank and close accounts.

  4. Retain Confirmation Documents
    Keep copies of all letters, certificates, and approvals.

This process typically takes 2 to 3 weeks for complete closure.

Closing a Private Limited Company or SMC

Private limited companies, including Single Member Companies (SMCs), must be dissolved through SECP. There are two main types of closures:

  • Voluntary Winding Up

  • Strike-off (Inactive or Dormant Status)

Voluntary Winding Up Process

This route is used when directors/shareholders voluntarily decide to close the company.

  1. Board Resolution for Winding Up
    The board of directors passes a resolution to initiate winding up.

  2. Appointment of Liquidator
    A registered liquidator is appointed to manage the closure and asset settlement.

  3. Notice to SECP and Publication
    Submit Form 26 and publish notice of winding up in newspapers.

  4. Settle All Liabilities
    The liquidator settles all company dues, employee rights, and tax obligations.

  5. Final General Meeting
    Held to approve final accounts and winding-up report.

  6. Application to SECP for Dissolution
    Submit Form 28 and final accounts. SECP reviews and removes the company from the register.

  7. Cancellation of NTN from FBR
    Apply through IRIS to close the company’s NTN and STRN.

The complete process can take 4 to 6 months.

Strike-Off Application (For Inactive Companies)

Companies with no operations may apply for strike-off under Section 43 of the Companies Act, 2017.

  1. File Application with SECP
    Submit Form 39 with:

  • Audited accounts

  • Affidavit of no liabilities

  • Board resolution

  1. SECP Review and Publication
    SECP publishes notice and allows public objection period.

  2. Final Strike-Off Order
    If no objections, SECP strikes off company within 2 months.

This route is quicker and costs less than voluntary winding up.

Closing a Public Limited Company

Public companies follow the same voluntary winding up process as private companies but require additional regulatory scrutiny.

  • Involves SECP, tax authorities, stock exchange (if listed)

  • Liquidators must be approved by SECP

  • Audit reports and notices are subject to public review

The process may take 6 to 12 months.

Tax De-Registration with FBR

Regardless of the business type, FBR de-registration is essential.

Steps to De-Register with FBR

  1. Login to IRIS Portal

  2. Go to “e-Enrollment” > De-registration request

  3. Provide reason, date, and evidence

  4. Submit closure documentation, such as:

  • SECP strike-off letter

  • Registrar’s dissolution certificate

  • Board resolution

  1. Wait for approval and NTN status change

De-registration usually takes 10 to 15 working days.

De-Registration from Sales Tax

If registered under sales tax or services tax:

  • Submit de-registration request via FBR, PRA, or SRB portals

  • Provide closure letter, final sales tax return, and business address deactivation

  • Wait for official cancellation notice

Tax de-registration is critical to avoid future tax notices or penalties.

Closing a Foreign Company Branch or Liaison Office

Foreign companies registered in Pakistan under SECP and BOI must:

  1. Apply for closure with Board of Investment (BOI)

  2. Notify SECP with all legal documentation

  3. Submit no objection certificates from:

  • FBR

  • SBP

  • Customs (if applicable)

  1. Close bank accounts and repatriate capital

  2. SECP removes the foreign entity from its register

This process may take 3 to 6 months.

Legal and Financial Considerations

  • Clear All Liabilities
    Never close a business with outstanding loans or legal dues.

  • Issue Final Pay Slips and Benefits
    Ensure employee settlements are done as per law.

  • Prepare Final Accounts
    Audited accounts are often needed for winding up and tax closure.

  • Update Stakeholders
    Inform vendors, clients, and regulators of closure status.

  • Retain Records
    Keep financial and tax records for at least 6 years as per law.

Common Mistakes to Avoid

  • Not de-registering with FBR after SECP closure

  • Missing newspaper publication during winding up

  • Overlooking employee dues or EOBI contributions

  • Not filing final tax returns

  • Not closing the business bank account

Role of Sterling.pk in Business Closure

At Sterling.pk, we help businesses of all types manage legal closure efficiently. Our services include:

  • Drafting dissolution deeds and resolutions

  • Filing SECP strike-off or winding up applications

  • Preparing tax de-registration files for FBR and PRA

  • Liquidation support for companies with assets and liabilities

  • Legal compliance advisory and audit coordination

  • Bank account closure and stakeholder communication

With our expert support, clients save time, avoid legal complications, and exit with complete documentation.

Conclusion

Closing a registered business in Pakistan requires following structured legal and tax procedures to ensure compliance with SECP, FBR, and other authorities. While sole proprietorships and partnerships can be dissolved relatively quickly, closing companies involves more formalities such as liquidation, public notices, and tax clearance.

Business owners must plan carefully, settle all dues, and submit complete documentation to avoid penalties and complications later. Whether your business is active or dormant, voluntary or mandatory closure should be handled professionally.

Sterling.pk offers full-service support for business closures, helping entrepreneurs and corporates wind up operations cleanly and lawfully across Pakistan.

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