How to incorporate a company in Pakistan
If you are planning to start a business in Pakistan, one of the first steps you need to take is to incorporate a company. Incorporating a company means registering it with the relevant authorities and obtaining a legal status and identity for your business. This will allow you to operate your business in a lawful manner, protect your personal assets from business liabilities, and enjoy various benefits and incentives offered by the government.
In this blog post, we will guide you through the process of incorporating a company in Pakistan, including the types of companies you can choose from, the documents and fees required, and the steps involved in the registration process.
Types of companies in Pakistan
According to the Companies Act 2017, there are four main types of companies that you can incorporate in Pakistan:
Private limited company
This is the most common type of company in Pakistan. A private limited company is a separate legal entity that can own property, enter into contracts, sue and be sued in its own name. A private limited company has a minimum of two and a maximum of 50 shareholders, who are not allowed to transfer their shares to the public. A private limited company must have at least two directors, who are responsible for managing the affairs of the company. A private limited company is suitable for small and medium-sized businesses that want to limit their liability and maintain control over their operations.
Public limited company
This is a type of company that can offer its shares to the public through an initial public offering (IPO) or a secondary market. A public limited company has a minimum of three and no maximum limit on the number of shareholders. A public limited company must have at least three directors, who are accountable to the shareholders and the regulators. A public limited company is suitable for large-scale businesses that want to raise capital from the public and enhance their credibility and visibility.
Single member company
This is a type of private limited company that has only one shareholder and one director, who can be the same person. A single member company enjoys all the benefits and obligations of a private limited company, except that it does not need to hold annual general meetings or appoint auditors. A single member company is suitable for sole proprietors who want to enjoy limited liability and tax advantages.
This is a type of company that is incorporated outside Pakistan but has a place of business or branch office in Pakistan. A foreign company must register with the Securities and Exchange Commission of Pakistan (SECP) within 30 days of establishing its place of business or branch office in Pakistan. A foreign company must comply with the laws and regulations applicable to its business activities in Pakistan.
Documents and fees required for incorporating a company in Pakistan
The documents and fees required for incorporating a company in Pakistan vary depending on the type and size of the company. However, some common documents and fees that apply to all types of companies are:
Before incorporating a company, you need to check whether your proposed name is available and not identical or similar to any existing name. You can check the name availability online through the SECP’s eService’s portal or by visiting any Company Registration Office (CRO). You need to pay a fee of PKR 200 for each name reservation application.
Memorandum and articles of association
These are the constitutional documents that define the objectives, scope, powers, rights, duties, and rules of the company. You need to prepare these documents according to the prescribed format and content provided by the SECP. You can download the sample memorandum and articles of association from the SECP’s website or obtain them from any CRO. You need to pay a fee based on the authorized capital of your company for filing these documents with the SECP.
This is an application form for incorporation of a company. You need to fill in this form with basic information about your company, such as name, address, type, authorized capital, shareholders, directors, etc. You need to pay a fee based on the authorized capital of your company for filing this form with the SECP.
This is a notice of situation of registered office of the company. You need to fill in this form with the address of your registered office, which must be located in Pakistan. You need to pay a fee of PKR 200 for filing this form with the SECP.
This is a return of particulars of directors, chief executive officer (CEO), secretary, auditors, legal adviser (if any), etc. You need to fill in this form with the details of your key personnel involved in managing your company. You need to pay a fee of PKR 200 for filing this form with the SECP.
Other documents: Depending on your type and size
Step one of company incorporation is creating a login in SECP.
How to create a login in SECP
SECP stands for Securities and Exchange Commission of Pakistan, which is the regulatory authority for the corporate sector in Pakistan. If you want to register a company, you need to create a login on their eservice’s portal.
Here are the steps to do so:
1. Go to https://eservices.secp.gov.pk/eServices/ and click on “Signup” on the top right corner of the page.
2. Choose your user type: National, Overseas NICOP Holders, or Foreign/POC Holders.
3. Enter your CNIC/NICOP/Passport number and a password of your choice. Make sure your password meets the security requirements shown on the screen.
4. Click on “Register” and follow the instructions to verify your email address and mobile number.
5. Once you have verified your account, you can log in to the eService’s portal using your CNIC/NICOP/Passport number and password.
Congratulations! You have successfully created a login in SECP. You can now access various services and features offered by SECP through their eService’s portal.
Step Two is Reserve a Name For your Company.
Click on the Company Registration tab and select Name Reservation.
1. Fill in the required details such as the proposed name, the nature of business, the address, and the contact information.
2. Pay the fee online through a credit card or a bank challan.
3. Submit the application and wait for the confirmation email from SECP.
4. If your name is approved, you will receive a name reservation certificate that is valid for 90 days.
5. If your name is rejected, you will have to apply again with a different name.
Reserving a name for your company in SECP is a simple and quick process that can help you secure your brand identity and avoid any legal complications. Make sure to choose a unique and distinctive name that reflects your business vision and values.
Step Three Submit Incorporation Application
This step can Be combined with Step two or send separately.
Once your name is approved, you need to prepare the following documents for incorporation:
– Form A: Application Form for Panel of Auditors and Specimen for Affidavit
– Form 29A: Declaration of Compliance with the Companies Ordinance
– Form 1: Declaration by Directors and Subscribers
– Memorandum and Articles of Association (MOA and AOA)
– Copies of CNICs of Directors and Subscribers
– Bank Challan for Incorporation Fee
You can download these forms from the SECP website for offline application (https://www.secp.gov.pk/company-formation/formsapplications-schedule-of-filling-of-returns/statutory-forms/) or use the online templates available on the eServices portal. You need to fill out these forms with accurate and complete information about your company, such as its name, address, objectives, capital, directors, subscribers, etc. You also need to get these forms signed by the relevant parties and attach the required documents.
The finally is to submit your incorporation application online through the eService’s portal or offline in SECP. You need to upload all the documents mentioned above and pay the incorporation fee according to the authorized capital of your company.
The fee ranges from Rs. 500 to Rs. 100,000 depending on the capital amount. You can generate a bank challan online and pay it at any designated bank branch.
The SECP will process your application within 4 working days and issue a certificate of incorporation if everything is in order. You can check the status of your application online or contact the SECP helpline for any queries.