A step-by-step guide on how to register a company in Pakistan:
Table of Contents.
Step 1: Selecting the type of company you want to register in Pakistan
The first step is to decide on the type of company you want to register. In Pakistan, there are several types of companies that can be incorporated under the Companies Act 2017. The main types of companies are as follows:
- Private Limited Company: This is the most common type of company in Pakistan. It requires a minimum of two and a maximum of fifty shareholders. The liability of shareholders is limited to the amount of their investment in the company.
- Single Member Company: This is a type of private limited company with only one shareholder. The shareholder is liable to the extent of their investment in the company.
- Public Limited Company: This is a company that can have an unlimited number of shareholders, and can issue shares to the public. The liability of shareholders is limited to the amount of their investment in the company.
- Not-for-Profit Company: This is a company that is established for charitable, religious, educational, or other not-for-profit purposes.
- Foreign Company: This is a company that is incorporated outside Pakistan, but carries on business in Pakistan. It is required to register with the SECP and follow certain regulations.
- Limited Liability Partnership (LLP): This is a type of partnership where the liability of each partner is limited to the extent of their investment in the partnership.
- Sole Proprietorship: This is a business owned by a single individual, who is responsible for all aspects of the business and is personally liable for its debts.
It is important to note that the requirements and regulations for each type of company may vary depending on the nature of its business activities and its specific circumstances.
Step 2: Checking the availability of the company name in Pakistan
Steps for checking name availability in Pakistan for a company:
- Visit the SECP eServices Portal The Securities and Exchange Commission of Pakistan (SECP) eServices portal can be accessed at https://eservices.secp.gov.pk/eServices/. This is the official portal for registering companies in Pakistan.
- Select Company Name Availability Search On the SECP eServices portal, click on the ‘Company Name Availability Search’ button. This will take you to the next screen.
- Enter Proposed Name of Company On the next screen, enter the proposed name of your company in the search bar. It is recommended to choose a unique and distinguishable name that is not already in use by another company.
- Click Search Once you have entered the proposed name of your company, click on the ‘Search’ button. This will initiate the search process to check the availability of the name.
- View Search Results After the search is completed, a list of results will be displayed on the screen. If the proposed name is available, it will be listed as ‘Available’ under the ‘Name Availability Status’ column. If the name is not available, the search results will display the reason for the name being unavailable.
- Reserve Company Name If the proposed name of your company is available, you can reserve it by clicking on the ‘Reserve Name’ button. This will initiate the process of reserving the name for your company for a period of 90 days.
Overall, checking the availability of a company name in Pakistan is a simple and straightforward process that can be completed online through the SECP eServices portal. It is important to choose a unique and distinguishable name that is not already in use by another company to avoid any legal issues in the future.
Step 3: Draft Memorandum and Articles of Association
After name availability confirmation, the next step is to draft the Memorandum of Association (MoA) and Articles of Association (AoA) of your company. Here’s a brief overview of how to draft Memorandum and Articles of Association:
The MOA is a legal document that defines the company’s scope of activities and sets out the objectives for which the company has been formed. It is one of the most important documents that need to be drafted while incorporating a company in Pakistan. Here are the steps for drafting the MOA:
- Define the Name and Registered Office of the Company
The first step in drafting the MOA is to define the name and registered office of the company. The name should be unique and not already registered with the SECP. The registered office should be located within Pakistan.
- Define the Objectives of the Company
The second step is to define the objectives of the company. The objectives should be clear, concise and specific to avoid any ambiguity. The MOA should also specify the nature of the business activities that the company will undertake.
- Define the Share Capital and Liability of the Members
The third step is to define the share capital and liability of the members. This section should specify the number of shares issued, their value and the rights attached to them. It should also specify the liability of the members in case the company is wound up.
The AOA is a document that sets out the rules and regulations governing the internal management and administration of the company. It outlines the rights and duties of the directors, shareholders and other officers of the company. Here are the steps for drafting the AOA:
- Define the Shareholders’ Rights and Responsibilities
The first step in drafting the AOA is to define the shareholders’ rights and responsibilities. This section should specify the voting rights of the shareholders, the procedure for conducting meetings, the quorum required and the procedure for passing resolutions.
- Define the Directors’ Powers and Duties
The second step is to define the directors’ powers and duties. This section should specify the appointment and removal of directors, their powers and duties, the procedure for conducting board meetings and the quorum required.
- Define the Company’s Administrative and Financial Procedures
The third step is to define the company’s administrative and financial procedures. This section should specify the procedure for keeping accounts, preparing financial statements and conducting audits.
Overall, drafting the MOA and AOA is an important aspect of incorporating a company in Pakistan. It is recommended to seek the assistance of a lawyer or a professional consultant to ensure that the documents are drafted in accordance with the requirements of the SECP and are legally binding.
Step 4: Get Company Incorporation Forms
The next step is to obtain the necessary company incorporation forms, there are several forms that need to be filled out for the incorporation of a company. The most common forms are as follows:
- Form-I: Declaration of compliance with the Companies Act, 2017. This is the application form for the reservation of a company name. The applicant needs to provide three names for the company, in order of preference, along with the proposed business activities and the names of the proposed directors.
- Form-II: This is the application for incorporation of a company. It includes details such as the name of the company, the proposed business activities, the names and addresses of the directors and shareholders, and the authorized and paid-up share capital.
- Form-III: This is the declaration of compliance with the requirements of the Companies Act. It is signed by the directors and states that all the requirements of the Act have been complied with.
- Form-21: This is the notice of situation of registered office of the company. It provides details about the location of the registered office of the company.
- Form-29: This is the consent of director to act form. It is signed by each director of the company and confirms that they are willing to act as a director.
- Form-A: This is the memorandum of association of the company. It sets out the name of the company, its objectives, and the rights and liabilities of its members.
- Form-B: This is the articles of association of the company. It sets out the internal regulations of the company, including the rules for the conduct of meetings, the powers of the directors, and the rights and duties of the shareholders.
These forms are required to be filled out and submitted to the Securities and Exchange Commission of Pakistan (SECP) along with the relevant fee. Once the forms are processed and approved, the company will be incorporated and a certificate of incorporation will be issued.
Step 5: Fill out the Incorporation Forms
You will need to fill out the incorporation forms with accurate information. Make sure that all the details provided are correct and complete. Inaccurate or incomplete information can lead to delays in the registration process.
Step 6: Pay the Required Fee
You will need to pay the required fee for registration. The fee varies depending on the type of company and the authorized capital. The following is a general guideline for the fee required:
- For a company with an authorized share capital of up to Rs. 100,000: The fee is Rs. 5,000.
- For a company with an authorized share capital of more than Rs. 100,000 and up to Rs. 1 million: The fee is Rs. 10,000.
- For a company with an authorized share capital of more than Rs. 1 million and up to Rs. 10 million: The fee is Rs. 15,000.
- For a company with an authorized share capital of more than Rs. 10 million and up to Rs. 100 million: The fee is Rs. 25,000.
- For a company with an authorized share capital of more than Rs. 100 million and up to Rs. 500 million: The fee is Rs. 50,000.
- For a company with an authorized share capital of more than Rs. 500 million: The fee is Rs. 100,000.
These fees are subject to change and may vary depending on the specific requirements of the company and the nature of its business. It is recommended to consult with a professional such as a lawyer or a chartered accountant for accurate information regarding the fees required for company incorporation in Pakistan.
Step 7: Submission of Documents
After filling out the incorporation forms and paying the required fee, you need to submit the documents to the SECP along with the following documents:
- Certified copies of CNICs of all directors
- Bank Challan receipt
- Certified copies of address proofs of all directors
Step 8: Get Certificate of Incorporation
The SECP will review the documents, and if everything is in order, will issue a Certificate of Incorporation. This certificate signifies that your company is now registered and can legally operate.
Step 9: Registration with Tax Authorities
After incorporation, you will need to register your company with the Federal Board of Revenue (FBR) for tax purposes. Following is a detailed overview of the procedure for registering with the tax authorities in Pakistan:
- Obtain National Tax Number (NTN) The first step in registering with the tax authorities is to obtain a National Tax Number (NTN) from the Federal Board of Revenue (FBR). You can obtain the NTN by submitting an application to the FBR online or through a designated branch of the National Bank of Pakistan.
- Obtain Sales Tax Registration Number (STRN) If your company is engaged in the supply of goods or services, you will need to obtain a Sales Tax Registration Number (STRN) from the FBR. The STRN can also be obtained through the same process as the NTN.
- Register for Withholding Tax If your company is required to deduct withholding tax on payments made to suppliers, contractors or employees, you will need to register for withholding tax with the FBR. This can be done online through the FBR’s e-portal or through a designated branch of the National Bank of Pakistan.
- Register for Professional Tax If your company employs professionals such as doctors, lawyers or engineers, you will need to register for professional tax with the relevant authority. The registration process and requirements may vary depending on the profession and the location of your company.
- Register for Provincial Taxes If your company operates in a province that imposes its own taxes such as the Punjab Sales Tax on Services Act, 2012 or the Sindh Sales Tax on Services Act, 2011, you will need to register for these taxes separately. The registration process and requirements may vary depending on the specific tax and the location of your company.
File Tax Returns Once your company is registered with the tax authorities, you will need to file tax returns on a regular basis. The frequency and deadlines for filing tax returns will depend on the type of tax and the location of your company.
Step 10: Registration with Other Government Institutes
Depending on the nature of your business, you may need to register with other government institutes such as the Securities and Exchange Commission of Pakistan (SECP) or the Pakistan Engineering Council (PEC) if you are in the engineering field. Following are a few other examples:
- Pakistan Engineering Council (PEC): A statutory body that regulates the engineering profession in Pakistan. PEC ensures that engineers and engineering firms maintain professional standards and ethics, and promotes the development of engineering education and research.
- Pakistan Software Export Board (PSEB): A government-owned organization that promotes and develops the IT industry in Pakistan. PSEB offers a range of services to IT companies, including training and certification programs, market research, and financial incentives.
- Pakistan Standards and Quality Control Authority (PSQCA): Responsible for setting and enforcing standards for goods and services in Pakistan. All companies involved in the production or sale of goods in Pakistan must comply with PSQCA standards.
- Non-Governmental Organization (NGO): A non-profit organization that operates independently of government to address social or environmental issues. NGOs can provide services, advocate for policy change, or engage in community development.
- Non-Profit Organization (NPO): Similar to an NGO, an NPO is a non-profit organization that operates to promote a particular cause or issue. Unlike NGOs, NPOs may also engage in religious, charitable, or educational activities.
- Drug Regulatory Authority of Pakistan (DRAP): A government organization responsible for regulating the pharmaceutical industry in Pakistan. DRAP ensures that drugs and medical devices are safe, effective, and of good quality.
- Securities and Exchange Commission of Pakistan (SECP): The primary regulatory body for the registration and monitoring of companies in Pakistan. SECP is responsible for regulating the corporate sector, securities market, and insurance industry.
- Punjab Revenue Authority (PRA): A provincial tax authority in Punjab responsible for the administration and collection of sales tax on services.
- Balochistan Revenue Authority (BRA): A provincial tax authority in Balochistan responsible for the administration and collection of sales tax on services.
- Khyber Pakhtunkhwa Revenue Authority (KPRA): A provincial tax authority in Khyber Pakhtunkhwa responsible for the administration and collection of sales tax on services.
- Sindh Revenue Board (SRB): A provincial tax authority in Sindh responsible for the administration and collection of sales tax on services.
Overall, the process for registering a company in Pakistan can take several weeks and requires careful attention to detail. It is recommended to seek the assistance of a legal or accounting professional to ensure compliance with all regulations and requirements.