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

1. 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.

2. 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.

3. 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.

4. 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

1. 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

2. 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

3. Fee Payment and Verification

   • Generate challan

   • Pay via online payment gateway or designated bank

   • Submit scanned paid challan

4. Certificate of Incorporation

   • Issued within 1–2 working days

5. 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

1. Draft a Partnership Deed

   • Define capital contributions, roles, dispute resolution, and profit-sharing ratios

   • Must be printed on legal stamp paper

2. Prepare and Submit Documents

   • Partnership deed (notarized)

   • Form-I duly signed

   • CNICs and affidavits of partners

   • Address proof

3. Submit to Registrar of Firms (at District Level)

   • Submit physically at local office

   • Pay registration fee

4. Issuance of Certificate

   • Usually within 7–10 business days

   • Valid for operating legally and opening a firm bank account

5. 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)

1. Reserve Company Name on SECP eServices

2. Submit Incorporation Forms with Multiple Director Details

3. Pay Incorporation Fee via SECP ePayment Gateway

4. Receive Certificate of Incorporation

5. 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

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.