Miscellaneous Legal Requirements for Companies in Pakistan

Introduction

Running a business in Pakistan involves more than just company registration and filing annual returns. To stay legally compliant and avoid penalties, companies must meet a range of miscellaneous legal requirements set by various regulatory authorities. These obligations—often overlooked—include maintaining statutory registers, disclosing beneficial ownership, ensuring labor and tax compliance, securing licenses, and adhering to sector-specific rules.

This in-depth guide explains the miscellaneous legal requirements every company in Pakistan must comply with, based on laws including the Companies Act, 2017, Income Tax Ordinance, 2001, Labor Laws, and regulations from SECP, FBR, EOBI, PESSI, and other regulatory bodies. Whether you’re a private limited company, a startup, an NGO, or a multinational corporation, this article will help you stay compliant.

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1. Statutory Registers and Records

Under the Companies Act, 2017, companies must maintain several statutory registers and records at their registered office:

• Register of Members (Section 119)

• Register of Directors and Officers (Section 120)

• Register of Charges (Section 128)

• Minutes of Meetings (Section 135)

• Books of Account (Section 220)

Penalty for Non-Compliance:

Failure to maintain statutory books can lead to fines up to PKR 500,000 and may also trigger SECP inspections.

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2. Beneficial Ownership Disclosure

As per Section 452 of the Companies Act, 2017, every company is required to file a declaration of beneficial ownership. This applies when someone holds at least 25% shares indirectly or exercises significant control.

• Form 45 must be submitted to SECP

• Updates must be filed within 30 days of any change

Penalty:

Up to PKR 1 million, plus daily fines for continuing default

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3. National Tax Number (NTN) and Filing Obligations

Every company must:

• Obtain a National Tax Number (NTN) from the Federal Board of Revenue (FBR)

• File annual income tax returns

• Submit monthly withholding tax statements (Section 165)

• Deduct and deposit withholding tax from payments made to employees, suppliers, contractors, etc.

Relevant Forms:

• Income Tax Return

• Withholding Tax Statements

• Sales Tax Return (if applicable)

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4. Sales Tax Registration and Compliance

Companies involved in taxable supplies must register for Sales Tax with FBR or Provincial Revenue Authorities like PRA, SRB, KPRA, BRA.

• File monthly sales tax returns

• Issue tax invoices

• Maintain input/output tax records

Penalty for Non-Compliance:

• Up to PKR 10,000 per day

• Suspension of registration

• Audit or enforcement action

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5. Maintenance of Bank Account in Company Name

A separate bank account must be maintained in the company’s registered name, and all financial transactions must flow through this account. This ensures transparency and is often required during audits or inspections by FBR, SECP, or banks.

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6. Employee-Related Legal Obligations

a. EOBI Registration

Under the Employees’ Old-Age Benefits Institution Act, 1976, employers must:

• Register every employee earning over the minimum wage

• Deduct 1% from the employee’s salary

• Contribute 5% from the employer side

• Submit monthly returns and payments

b. Social Security (PESSI/SESSI)

Applicable under Provincial Social Security Laws, employers must:

• Register with PESSI (Punjab) or SESSI (Sindh)

• Pay contributions monthly (around 6% of salary)

• Provide employee medical and injury coverage

Penalties:

• Fines up to PKR 5,000/month/employee

• Recovery actions or inspections

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7. Labor Laws and Minimum Wage Compliance

Employers must comply with the following:

• Maintain attendance records, salary sheets, and employment contracts

• Ensure compliance with Minimum Wages Ordinance

• Maintain leave and overtime records

• Comply with the Factories Act, 1934 (where applicable)

Labor departments conduct surprise inspections, and non-compliance can lead to fines, closure notices, or legal proceedings.

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8. Environmental Compliance (For Industrial Units)

Under the Pakistan Environmental Protection Act, 1997, companies involved in manufacturing or industrial activities must:

• Obtain a No-Objection Certificate (NOC) from EPA

• Conduct an Initial Environmental Examination (IEE) or Environmental Impact Assessment (EIA)

• Submit environmental reports

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9. Workplace Safety and Fire Compliance

In sectors such as manufacturing, warehouses, and high-rise offices, companies must comply with:

• Fire safety regulations

• Building codes

• Emergency exits, alarms, and extinguishers

Lack of compliance can result in closure of premises or revocation of operating licenses.

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10. Trademark and Intellectual Property Registration

Businesses should protect their brand identity by registering:

• Trademarks

• Copyrights

• Patents

The Intellectual Property Organization of Pakistan (IPO-Pakistan) is the designated authority. Unregistered marks may be copied or disputed in court.

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11. Display of Company Information

According to SECP regulations:

• Name of the company, registration number, and head office address must be displayed at:

  • All business premises

  • Letterheads and invoices

  • Company website and emails

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12. Compliance with Import/Export Licensing (Where Applicable)

For companies engaged in international trade:

• Register with Pakistan Single Window (PSW)

• Obtain a WEBOC user ID

• Secure licenses or permits from Ministry of Commerce, Drug Regulatory Authority, or Pakistan Customs

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13. Filing of Form 29 (Change in Directors)

Whenever there is a:

• Appointment

• Resignation

• Removal

• Change in particulars of any director

Form 29 must be filed with SECP within 15 days.

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14. Appointment of Auditors and Audit Filing

Companies (except small companies) must:

• Appoint auditors annually

• Submit audited financial statements to SECP

• Present audited accounts at AGM

Failure to do so may lead to disqualification of directors and penalties up to PKR 1 million.

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15. Annual General Meetings (AGMs)

Public companies are required to:

• Hold an AGM within 120 days of the end of financial year

• Circulate notice and agenda to shareholders

• Get approval for financial statements and dividends

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16. Maintenance and Filing of Resolutions

Companies must maintain copies of all:

• Board Resolutions

• Shareholder Resolutions

• Special Resolutions (e.g., change in MoA)

Certain resolutions must also be filed with SECP using Form 26 or Form 27.

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17. Record of Related Party Transactions

As per corporate governance principles, companies must:

• Maintain logs of related party transactions

• Disclose them in financial statements

• Obtain approval from board or shareholders as required

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18. Sector-Specific Legal Requirements

a. NGOs and NPOs

• Obtain registration under Section 42 or Societies Act

• File annual reports with SECP and Economic Affairs Division

• Submit tax returns under Section 100C

b. Insurance Companies

• Comply with Insurance Ordinance, 2000

• File reports with SECP’s Insurance Division

• Maintain solvency and policyholder protection reserves

c. Modarabas and NBFCs

• File quarterly returns

• Comply with NBFC Rules

• Maintain minimum capital and conduct Shariah audits

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19. Data Protection and IT Compliance (Emerging)

With the Personal Data Protection Bill under consideration, companies handling customer data must:

• Implement data security protocols

• Appoint data protection officers (for large firms)

• Obtain consent for data processing

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20. SECP Inspections and Surprise Audits

SECP may initiate routine or surprise inspections of a company’s records. To avoid penalties:

• Maintain updated registers

• Cooperate with inspectors

• Respond to notices promptly

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Penalties for Miscellaneous Non-Compliance

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Best Practices for Ensuring Legal Compliance

• Maintain a compliance calendar

• Appoint a qualified company secretary or legal advisor

• Conduct internal audits quarterly

• Subscribe to SECP/FBR updates

• Use corporate compliance software

• Engage professional firms like Sterling.pk

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Conclusion

Legal compliance in Pakistan is multi-faceted, covering not just corporate filings but also tax, labor, environmental, and operational obligations. Overlooking miscellaneous legal requirements may result in fines, reputational damage, and even criminal liability. Whether you’re running a startup, SME, or large corporation, developing a compliance-first mindset is essential for long-term success.

By staying proactive and engaging experts like Sterling.pk, your business can not only meet legal standards but also build a reputation for reliability and integrity in Pakistan’s competitive market.