Legal requirements for company registration in Pakistan

Registering a company in Pakistan is a structured legal process regulated by the Securities and Exchange Commission of Pakistan (SECP) under the Companies Act, 2017. Whether you are a local entrepreneur, a foreign investor, or a startup founder, understanding the legal requirements is essential for compliance and smooth operation. This article outlines the complete legal requirements for company registration in Pakistan, covering documentation, legal structure, procedural formalities, and post-registration obligations.

1. Governing Laws and Regulatory Bodies

a. Companies Act, 2017
This Act governs the incorporation, regulation, and dissolution of companies in Pakistan. It outlines duties of directors, rights of shareholders, disclosure obligations, and compliance requirements.

b. Regulatory Authorities
The primary authorities involved in the legal registration process include:

• SECP (Securities and Exchange Commission of Pakistan)

• FBR (Federal Board of Revenue) – for tax registration

• Provincial Revenue Authorities – for sales tax and professional tax

• Chambers of Commerce – for exporters, importers, and traders

• Board of Investment (BOI) – for foreign-owned entities

2. Eligible Legal Structures for Registration

The Companies Act allows for the following types of companies:

• Single Member Company (SMC)

• Private Limited Company

• Public Limited Company (Unlisted or Listed)

• Non-Profit Company (Section 42)

• Foreign Company (Branch/Liaison Office)

• Limited Liability Partnership (LLP) – under LLP Act, 2017

Each type of company has distinct legal requirements for formation and post-registration compliance.

3. Minimum Legal Requirements for Company Incorporation

a. Minimum Number of Directors and Shareholders

b. Director Qualifications

• Must be a natural person over 18 years

• Not declared bankrupt or convicted by a court

• CNIC (Pakistani nationals) or Passport (foreign nationals)

• Foreign nationals must comply with additional BOI approvals

4. Company Name Requirements

The company name must:

• Not be identical to an existing registered name

• Not include prohibited words such as “Federal,” “Authority,” “Bank,” etc.

• Comply with SECP’s Name Reservation Guidelines

• Reflect business activity (for certain regulated sectors)

Name reservation is filed through SECP’s eServices portal.

5. Documentation Requirements

The following documents are required as part of the legal incorporation process:

a. Form-I: Declaration of Compliance
Signed by a director or intermediary confirming compliance with legal requirements.

b. Form-21: Notice of Registered Office
Declaration of company’s official address in Pakistan.

c. Form-29: Particulars of Directors, CEO, and Officers
Includes names, CNIC/passport numbers, designations, and addresses.

d. Memorandum of Association (MOA)
Defines the company’s scope, business objects, authorized share capital, and location.

e. Articles of Association (AOA)
Lays out rules for internal governance, share structure, decision-making, and rights of shareholders.

f. Identity Documents

• Scanned CNICs of all Pakistani directors

• Passports of foreign directors (with certified Urdu translation)

g. Digital Signatures (PKI Tokens)
All subscribers and directors must sign documents using SECP-approved digital signatures.

h. Nominee Consent (For SMCs)
A consent letter from the nominee director who will take over the company in case of death/incapacity of the sole member.

i. Power of Attorney (if applicable)
If a consultant or legal agent is filing on behalf of the company, a notarized Power of Attorney must be provided.

6. Capital Requirements

There is no minimum capital requirement for a Private Limited or SMC. However, SECP charges a registration fee based on authorized capital:

• Rs. 100,000 capital – Minimal fee

• Rs. 1 million+ capital – Higher SECP fee bracket

• For Public Limited Companies, a capital deposit certificate may be required

7. Digital Signature Requirement

All applicants must obtain Digital Signature Certificates (DSCs) to submit forms online. These are issued by:

• NIFT (National Institutional Facilitation Technologies)

• SECP-licensed vendors

DSCs ensure the secure and verified electronic submission of forms.

8. Payment of Incorporation Fee

Incorporation fees are calculated based on:

• Type of company

• Authorized capital

• Mode of submission (online is cheaper than offline)

Fees are paid online via credit card, Easypaisa, or bank transfer through the SECP portal.

9. Incorporation Certificate and Legal Status

Once approved, SECP issues a Certificate of Incorporation, confirming the legal existence of the company. This certificate includes:

• Company Name

• Incorporation Number

• Date of Incorporation

• Company Type

This certificate legally establishes the company as a separate legal entity in Pakistan.

10. Post-Incorporation Legal Requirements

After registration, companies must comply with the following legal obligations:

a. Obtain NTN (National Tax Number)
Issued by FBR for filing tax returns and conducting business legally. Required documents include:

• Certificate of Incorporation

• CNICs/Passports of directors

• Company email, address, and contact info

b. File Form 45 (in case of Public Companies)
Submission of a prospectus or statement in lieu of prospectus for share offerings.

c. Filing of Annual Returns (Form A)
All companies must file their annual returns with SECP detailing:

• Shareholding structure

• Paid-up capital

• Changes in directors

• Company status

d. Filing of Form 29 (Changes in Management)
Whenever there is an appointment or resignation of directors or officers, Form 29 must be filed.

e. Appointment of Auditor (mandatory for some companies)
Medium and large companies must appoint a chartered accountant for statutory audit purposes.

f. Maintenance of Statutory Registers
Under Companies Act, 2017, companies are required to maintain:

• Register of Members

• Register of Directors

• Register of Charges (for borrowed funds)

g. First Board Meeting and Resolutions
Upon incorporation, the company must hold a board meeting to:

• Appoint CEO

• Authorize bank account opening

• Approve business operations

• Approve issuance of shares

11. Tax and Regulatory Registrations

a. Sales Tax Registration
Mandatory for businesses providing taxable goods/services. Registered with:

• FBR – for federal sales tax

• SRB/PRA/KPRA/BRA – for services in provinces

b. Professional Tax
Required in Punjab, Sindh, and other provinces for employers with salaried staff.

c. Chamber of Commerce Registration
Mandatory for import/export and trade-based businesses.

12. Special Licensing Requirements

Certain businesses require special regulatory licenses after incorporation:

13. Requirements for Foreign Shareholders

When a company has foreign shareholders, additional legal documentation is needed:

• Passport copies (translated and notarized)

• Board resolution from foreign parent company

• Letter of intent for capital investment

• Approval from Board of Investment (BOI)

14. Legal Penalties for Non-Compliance

Failure to meet legal obligations may result in:

• Fines and penalties imposed by SECP or FBR

• Legal actions for concealment or misrepresentation

• Deregistration or suspension of the company

• Disqualification of directors

15. Benefits of Legal Compliance

Meeting all legal requirements ensures:

• Proper tax compliance

• Enhanced credibility with clients, banks, and regulators

• Eligibility for government incentives (especially for exporters)

• Protection against legal disputes or director liabilities

Conclusion

The legal requirements for company registration in Pakistan are comprehensive but well-structured. From selecting a business structure to submitting incorporation documents, complying with SECP regulations, and fulfilling tax and post-incorporation filings, the process demands accuracy and legal knowledge.

At Sterling.pk, we assist entrepreneurs, SMEs, and foreign investors with end-to-end company registration services in Pakistan. Our expert consultants manage SECP filings, prepare all legal documents, obtain tax registrations, and guide you through regulatory compliance—so your business starts strong and stays compliant.