Starting a business in Pakistan requires legal registration with the relevant authorities to operate lawfully, open corporate bank accounts, file taxes, and build brand credibility. The Government of Pakistan—through the Securities and Exchange Commission of Pakistan (SECP) and the Federal Board of Revenue (FBR)—has made the registration process significantly more digital and accessible in recent years.
Entrepreneurs can choose from several legal structures depending on their capital, ownership style, risk appetite, and growth plan. The most common forms are Sole Proprietorship, Association of Persons (AOP), Single Member Company (SMC), and Private Limited Company (LLC).
This guide focuses on legally recognized and tax-registered entities—AOP, SMC, and LLC—under the Partnership Act, 1932, and Companies Act, 2017.
Types of Business Structures in Pakistan
Sole Proprietorship
An informal business owned by a single person. It requires only an NTN (National Tax Number) from FBR but has no legal separation between the owner and the business. It is not covered in this article due to its unregistered nature.AOP – Association of Persons (Partnership Firm)
Formed by two or more individuals through a partnership deed and registered under the Partnership Act, 1932. It is a flexible option for traders, small businesses, and family-run ventures.SMC – Single Member Private Limited Company
A limited liability company registered with SECP by a single individual. It enjoys legal status separate from the owner and is ideal for solo professionals or consultants.LLC – Private Limited Company (with Two or More Shareholders)
A fully registered legal entity under SECP. With two or more shareholders/directors, it is preferred for startups, tech companies, exporters, and growing businesses needing funding and credibility.
1. SMC – Single Member Company Registration in Pakistan
Overview
Registered under the Companies Act, 2017 with the SECP. A single person owns all the shares of the company.
Key Features
Limited liability and separate legal entity
Only one shareholder/director
Nominee director is mandatory
Can be upgraded to a multi-member private limited company
Suitable for freelancers, consultants, small service providers, and e-commerce sellers
Required Documents
CNIC of the owner and nominee
Residential or commercial address proof
Valid email and mobile number
MOA and AOA (Memorandum and Articles of Association)
Bank challan for incorporation fee
Company name approval application
Step-by-Step Registration Process
Name Reservation on SECP eServices
Register a user account on SECP eServices
Submit name reservation request (Form 38)
Pay fee online or at designated banks
Submission of Incorporation Documents
Fill incorporation forms:
Form 1: Company registration application
Form 21: Registered office address
Form 29: Particulars of nominee
Upload CNIC, MOA & AOA
Fee Payment and Verification
Generate challan
Pay via online payment gateway or designated bank
Submit scanned paid challan
Certificate of Incorporation
Issued within 1–2 working days
Post-Incorporation Steps
Apply for NTN using IRIS (FBR online portal)
STRN registration (if selling taxable goods or services)
Open a corporate bank account
Apply for PSEB registration if in the IT sector
2. AOP – Partnership Firm Registration in Pakistan
Overview
Governed by the Partnership Act, 1932. Ideal for traditional businesses, family ventures, and firms with shared ownership.
Key Features
Minimum 2 partners; no upper limit
No limited liability – personal assets can be at risk
Easier to dissolve or restructure than a company
Commonly used for retail, trading, and small-scale service firms
Required Documents
CNICs of all partners
Drafted partnership deed on stamp paper
Affidavits from all partners
Proof of business address (utility bill)
Form-I (Statement of Partnership)
Step-by-Step Registration Process
Draft a Partnership Deed
Define capital contributions, roles, dispute resolution, and profit-sharing ratios
Must be printed on legal stamp paper
Prepare and Submit Documents
Partnership deed (notarized)
Form-I duly signed
CNICs and affidavits of partners
Address proof
Submit to Registrar of Firms (at District Level)
Submit physically at local office
Pay registration fee
Issuance of Certificate
Usually within 7–10 business days
Valid for operating legally and opening a firm bank account
Post-Registration Steps
Register for NTN on FBR IRIS Portal
Open firm bank account
Register for sales tax if applicable
3. LLC – Private Limited Company (with Two or More Directors)
Overview
LLCs are registered under the Companies Act, 2017 with SECP and are suitable for scalable startups, exporters, and businesses seeking investment.
Key Features
Requires minimum 2 directors (up to 50 shareholders)
Limited liability and perpetual succession
Ideal for funding, export-based business, or technology companies
Legal identity separate from owners
Required Documents
CNICs of all directors/shareholders
Proof of business address
MOA and AOA
Valid email and mobile numbers
Forms 1, 21, and 29
Paid challan for SECP fees
Registration Process (Same as SMC with Additional Directors)
Reserve Company Name on SECP eServices
Submit Incorporation Forms with Multiple Director Details
Pay Incorporation Fee via SECP ePayment Gateway
Receive Certificate of Incorporation
Post-Registration Steps
Apply for NTN & STRN
Open business bank account
Register with PSEB if applicable
Register for Employees Old Age Benefit (EOBI), Punjab Social Security (PESSI) if hiring staff
Comparison Table: SMC vs AOP vs LLC
Feature | SMC Private Limited | Partnership (AOP) | Private Limited (LLC) |
---|---|---|---|
Legal Entity | Yes | No | Yes |
Minimum Members | 1 | 2 | 2 |
Maximum Members | 1 | Unlimited | 50 |
Limited Liability | Yes | No | Yes |
Registration Authority | SECP | Registrar of Firms | SECP |
Conversion Option | Can become LLC | Can become LLC | Already LLC |
Tax Filing Required | Yes | Yes | Yes |
Suitable For | Freelancers, Solo | Traders, small firms | Startups, exporters |
Post-Registration Legal Compliance (2025 Update)
NTN Registration: Mandatory for all entities through FBR IRIS
STRN Registration: Required for sales-taxable goods or services
Annual Returns:
SMC & LLC: Submit Form A (Annual Return) and Form 29 (Change in Directorship) every year
AOP: File partnership tax return and income tax of partners
Accounting & Audit:
Maintain books of accounts and submit audited financials if applicable
Public interest companies or large LLCs may require external audit
Corporate Bank Account: Mandatory for business operations
PSEB Registration (for IT firms): Required to get income tax exemption on software and IT exports
SECP Beneficial Ownership Declaration: Must declare Ultimate Beneficial Owners (UBOs)
Frequently Asked Questions (FAQs)
Q1: Should I register an SMC or an AOP for my small business?
SMC is better for solo professionals needing liability protection. AOP is easier to manage but lacks corporate benefits.
Q2: Can a foreigner open a company in Pakistan?
Yes, foreign nationals can register LLCs but must comply with local director and compliance requirements.
Q3: Is registration with SECP mandatory?
Only for companies (SMC and LLC). AOPs are registered with the Registrar of Firms.
Q4: Is SECP registration sufficient to start business operations?
No. You also need to register for tax (NTN/STRN) and open a corporate bank account.
Q5: Can a company be registered completely online?
Yes. SECP allows online registration for companies via its eServices portal. AOP registration is still manual in most districts.
Q6: What is the cost of registration?
SECP fee ranges from PKR 1,500 to PKR 5,000 depending on capital. AOP costs depend on stamp paper value and registrar fee.
Conclusion
Registering your business in Pakistan is the first step toward operating legally and growing sustainably. Choosing the right structure—SMC, AOP, or LLC—depends on your ownership preferences, financial goals, and risk tolerance. With SECP’s eServices and FBR’s IRIS platform, legal business formation is now simpler, faster, and digital.
It is strongly recommended to consult with a professional firm or tax advisor to ensure compliance with all relevant laws and optimize tax benefits.