Transferring ownership of a registered company in Pakistan involves a set of legal, procedural, and regulatory steps governed by the Companies Act, 2017 and administered by the Securities and Exchange Commission of Pakistan (SECP). Ownership is typically transferred by selling or gifting shares to another individual or entity, resulting in a change in the company’s shareholding structure. Whether it’s for succession planning, investment, exit strategy, or internal restructuring, the process must be properly documented and filed with the SECP to ensure legal validity and compliance. This guide outlines all the steps, documents, forms, and considerations involved in transferring ownership of a private limited company or single-member company in Pakistan in 2025.
Understanding Ownership Transfer in a Company
Ownership of a company is reflected by shareholding. Transferring ownership means transferring shares of the company from existing shareholders to new ones. In a Private Limited Company (Pvt Ltd) or Single Member Company (SMC), shares are not freely transferable like in public companies, and the transfer is subject to restrictions stated in the Articles of Association.
Ownership transfer may involve:
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Sale of shares (most common)
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Gift of shares
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Transfer due to succession/inheritance
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Transfer as part of merger or acquisition
Step-by-Step Process of Ownership Transfer
Step 1: Review the Articles of Association
Before proceeding, review the company’s Memorandum and Articles of Association to check any restrictions or conditions related to share transfers. Many private companies require:
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Board approval before transferring shares
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First offering of shares to existing shareholders (Right of Pre-emption)
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Share valuation process
If such provisions exist, they must be complied with before executing the transfer.
Step 2: Execute a Share Purchase Agreement (SPA)
If the transfer is through a sale, the buyer and seller must sign a Share Purchase Agreement, detailing:
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Number and class of shares
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Price per share
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Total consideration
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Payment terms
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Effective date of transfer
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Warranties and obligations of each party
This agreement serves as legal evidence of the transaction.
Step 3: Prepare the Share Transfer Deed
A Share Transfer Deed (also known as Form 29 Annexure or Share Transfer Instrument) must be prepared and signed by:
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Transferor (the person selling the shares)
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Transferee (the person buying/receiving the shares)
The deed must include:
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Name and address of both parties
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Number of shares being transferred
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Consideration amount
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Folio numbers
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Company details
The deed should be printed on a Stamp Paper of appropriate value (typically 0.5% of the transaction value as per Stamp Act applicable in the relevant province).
Step 4: Board Resolution Approving the Transfer
The company must convene a Board of Directors’ Meeting to:
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Review the share transfer documents
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Approve the transfer of shares
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Authorize updating of the Share Register
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Authorize the filing of Form 29 with SECP
The Board Resolution should be recorded in the minutes and signed by the chairperson.
Step 5: Update the Register of Members
Once the board approves the transaction, the company secretary or authorized officer updates the Register of Members (shareholders) to reflect the change in ownership. This is a statutory record of all shareholders and must always be current and accurate.
Step 6: File Form 29 with SECP
The transfer of ownership must be reported to the SECP by submitting Form 29 (Return of Change in Directorship or Officers, or Shareholders) within 15 days of the transfer.
Steps:
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Log in to the SECP eServices portal: https://eservices.secp.gov.pk
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Select “Statutory Filings (Post Incorporation)”
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Choose “Form 29 – Changes in particulars”
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Fill out details of new and outgoing shareholders
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Upload:
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Signed Share Transfer Deed
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Board Resolution
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CNICs of transferor and transferee
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Pay the Form 29 filing fee online (ranges from Rs. 500 to Rs. 1,000)
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Submit the form electronically
Once accepted, SECP issues an acknowledgment and updates the company record.
Step 7: Issue Share Certificate to New Owner
After approval, the company must issue a new share certificate in the name of the transferee and cancel or amend the original certificate issued to the transferor. The new certificate must be signed by two directors or a director and the company secretary.
Details on the certificate should include:
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Name of shareholder
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Number of shares
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Certificate number
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Distinctive numbers
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Date of issue
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Company seal
Tax Implications and Stamp Duties
Capital Gains Tax (CGT)
If the seller makes a profit on the sale of shares, it may be subject to capital gains tax under the Income Tax Ordinance, 2001, unless:
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The company is a private limited company and the seller is not trading in shares professionally
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The shares were gifted, not sold
The CGT rate varies depending on the holding period and whether the seller is a filer or non-filer.
Stamp Duty
Stamp duty on share transfer is imposed under Stamp Act, 1899. It is generally 0.5% of the consideration value of shares (subject to minimum thresholds) and is paid through adhesive or e-stamp papers.
Federal Excise Duty (FED)
There is no FED on transfer of shares in private companies.
Legal and Regulatory Considerations
Due Diligence
Before acquiring shares, the buyer should conduct proper due diligence, including:
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Financial health of the company
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SECP filings and compliance history
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Tax return status
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Bank liabilities or contingent obligations
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DRAP licenses (for pharma), PRA/SRB registrations (for service companies)
Change in Directors or CEO
If the ownership transfer leads to change in directors or chief executive officer, the company must file additional Form 29 entries indicating resignation/appointment of officers.
Change in Authorized Capital (if required)
If the buyer wants to increase shareholding beyond current authorized capital, the company must file Form 7 (Increase in Authorized Share Capital) with SECP before issuing new shares.
Updating Tax and Banking Records
Once the shareholding change is complete, update the records with:
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FBR (NTN profile and Form 181)
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Banking partners
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Chamber of Commerce (if applicable)
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Provincial Revenue Authorities for sales tax on services
Transfer in a Single Member Company (SMC)
In an SMC, the sole shareholder transfers ownership by:
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Appointing the new nominee through Form 1A
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Executing share transfer deed
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Updating company records
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Filing Form 3 (if memorandum is altered) and Form 29
The process is similar to a Pvt Ltd company but requires additional updates regarding the sole member and nominee.
Conclusion
Transferring ownership of a registered company in Pakistan is a structured legal process that requires proper documentation, board approvals, and timely filings with the SECP. Whether you’re selling, gifting, or transferring shares, compliance with the Companies Act, 2017 and SECP procedures is essential to ensure a valid and enforceable transfer. By following the correct steps—executing share transfer instruments, filing Form 29, and issuing share certificates—companies can achieve transparent, lawful changes in ownership while maintaining up-to-date corporate records. Always consult a legal or corporate advisor to ensure that the process aligns with current laws, tax implications, and business interests.
