Incorporating a company in Pakistan involves several steps and processes, as per the Companies Act, 2017. Here is a step-by-step guide on how to incorporate a company in Pakistan:
- Company Name Reservation: The first step in incorporating a company in Pakistan is to reserve the proposed name of the company. The name must be unique and not identical or similar to the names of existing companies. The name can be reserved online through the Securities and Exchange Commission of Pakistan (SECP) eServices portal. Once the name is reserved, it will be valid for 90 days.
- Preparation of Memorandum of Association (MoA) and Articles of Association (AoA): The Memorandum of Association (MoA) and Articles of Association (AoA) are the legal documents that define the constitution and rules of the company. The MoA includes the company’s name, registered office, objectives, share capital, and liability of members, while the AoA outlines the internal regulations, management structure, and operational procedures of the company. These documents must be prepared in accordance with the requirements of the Companies Act and must be signed by the subscribers (promoters) in the presence of witnesses.
- Submission of Incorporation Documents to SECP: Once the company name is reserved and the MoA and AoA are prepared, the next step is to submit the incorporation documents to the SECP. The required documents include the signed copies of MoA and AoA, Form 1 (Declaration of Compliance), Form 21 (Notice of Situation of Registered Office), Form 29 (Particulars of Directors, Chief Executive, Secretary, and Auditors), and Form 30 (Particulars of Shareholders). These documents can be submitted online through the SECP eServices portal.
- Payment of Fee: Along with the submission of incorporation documents, the applicable fee must be paid to the SECP. The fee depends on the authorized share capital of the company as mentioned in the MoA. The fee can be paid online through the SECP eServices portal or through designated branches of authorized banks.
- Obtaining Digital Signature and National Tax Number (NTN): After the submission of incorporation documents and payment of fee, the company directors and subscribers are required to obtain a Digital Signature Certificate (DSC) from the National Institutional Facilitation Technologies (NIFT) and a National Tax Number (NTN) from the Federal Board of Revenue (FBR). The DSC is used for online filing of documents with the SECP, and the NTN is required for tax purposes.
- Verification and Approval by SECP: Upon receiving the incorporation documents, the SECP verifies the documents and conducts a review of the MoA, AoA, and other information provided. If the documents are in compliance with the Companies Act and other relevant laws, the SECP issues a Certificate of Incorporation, which signifies the company’s legal existence.
- Registration with Federal Board of Revenue (FBR): After obtaining the NTN, the company is required to register with the FBR for income tax, sales tax, and other tax purposes. The registration can be done online through the FBR eServices portal, and the company is issued a Sales Tax Registration Number (STRN) and an Income Tax Registration Number (IRTN).
- Post-Incorporation Requirements: Once the company is incorporated, there are certain post-incorporation requirements that must be fulfilled. These include maintaining proper books of accounts, filing annual returns with the SECP, holding regular meetings of shareholders and directors, and complying with other legal and regulatory obligations.
It’s important to note that the process of incorporating a company in Pakistan may vary depending on the type of company being incorporated, such as a private limited company, public limited company, or
non-profit company. Additionally, the requirements and procedures may change over time, so it’s essential to consult the latest Companies Act and regulations, as well as seek professional advice to ensure compliance with the current legal requirements.
Here are some additional details on the incorporation process for different types of companies in Pakistan:
- Private Limited Company: A private limited company is the most common form of company incorporated in Pakistan. It must have a minimum of two and a maximum of fifty shareholders, and the shares of the company cannot be freely transferable. The incorporation process for a private limited company is as mentioned above, and the MoA and AoA must specify that the company is a private limited company.
- Public Limited Company: A public limited company can have an unlimited number of shareholders, and its shares are freely transferable. The incorporation process for a public limited company is similar to that of a private limited company, with some additional requirements. For example, the company must issue a prospectus or a statement in lieu of a prospectus, and the minimum paid-up capital requirement for a public limited company is higher than that of a private limited company.
- Non-profit Company: A non-profit company is incorporated for charitable, educational, or other non-profit purposes, and it must apply its profits solely for its objectives. The incorporation process for a non-profit company is similar to that of a private limited company, with some additional requirements. For example, the MoA must include a clause stating that the company is a non-profit company, and the company must obtain approval from the relevant authority, such as the Federal Board of Revenue or the provincial government, for tax exemptions and other privileges.
In conclusion, incorporating a company in Pakistan involves several steps and processes as per the Companies Act, 2017. The process includes reserving a unique name, preparing the MoA and AoA, submitting incorporation documents to the SECP, obtaining digital signature and NTN, verification and approval by SECP, registration with the FBR, and fulfilling post-incorporation requirements. It’s important to follow the legal requirements and seek professional advice to ensure compliance and successful incorporation of a company in Pakistan.