Company Registration in Pakistan: A Walkthrough

This walkthrough provides an overview of company registration in Pakistan, including types of business setups, business incorporation procedures, requirements of SECP, and important references under Pakistan’s company law. Whether planning to register a pvt ltd company, sole proprietorship, or a foreign company, this article hopefully will address all essential aspects for establishing, registering, running, and managing a business in Pakistan.

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Understanding Company Law and Types of Companies in Pakistan

Under the Companies Act, 2017, a company is defined as a body corporate registered under the Act; it is a separate legal identity that can sue or be sued in its own name. Several types of companies are permitted under Pakistani Company laws, each suited for different business purposes

Company Limited by Shares

It is a type of company where the liability of its members is limited by the memorandum to the extent of the amount remaining unpaid on shares held by members. It has further of its kinds, such as

Single Member Company (SMC)

As evident from its name, this company is formed by a single person, meaning thereby this type of company has only one Director.

Private Limited Company (PVT LTD)

In contrast to SMC, this type of company requires two or more members. The limit of maximum members is capped at 50

Public Limited Company (LTD)

This type of company also requires three or more than three individuals. But unlike Pvt Ltd Company, this type allows public share offerings.

Other Types of Companies

Here are some other types of companies other than SMC and PVT LTD company.

Company Limited by Guarantee

This is a kind of company where members’ liability is limited by the memorandum to such amount as the members undertake to contribute to the assets of the company in the event that the company is being wound up. This also includes a company formed under Section 42 of the Companies Act 2017, i.e., a Non-Profit Organisation (NPO).

Unlimited Company

It is the kind of company where the member’s liability is unlimited.

Specialized Companies

This company is formed to conduct a specialized kind of business that may include banks, insurance companies, NBFCs, and brokerages. This type of company formation requires obtaining specific licenses before commencing operations.

License for Incorporation and Sector-Specific Certifications

Certain companies need licenses for lawful operation.

Non-Profit Organizations (NPOs)​: Must obtain a license under Section 42.

Specialized Businesses: Banking, insurance, and NBFCs require sector-specific licenses. Public sector companies must meet Public Sector Companies (Corporate Governance) Rules, 2013.

Types of Business Setups in Pakistan

The following are the different types of business structures that can be set up in Pakistan. Each business type has its own benefits and setup process, based on the nature of the business and the needs of the owner.

A simple, single-owner structure, quick to establish but without limited liability protection.

Formed by two or more individuals, with liability shared among partners per the partnership agreement, allowing a maximum of eight partners.

3. Company

A company is defined as a body corporate registered under the Act; it is a separate legal identity that can sue or be sued in its own name.

4. Foreign Companies

A foreign company, as defined in Section 2(1)(35), refers to an entity incorporated outside Pakistan, operating in Pakistan through a local office or agent.

5. Limited Liability Partnership (LLP)

When two or more persons join to carry on a business with a view to make a profit, they may form an LLP. It is a partnership that has the status of a separate legal entity from its partners.

6. Branch Office

Allows foreign companies to execute contractual obligations in Pakistan but limits activities strictly to the contract scope.

7. Liaison Office

Operates for promotional purposes, such as product promotion or technical advice, but is prohibited from engaging in commercial trade.

Incorporation of a Company in Pakistan

The Companies Act, 2017 outlines incorporation procedures through subscription to the Memorandum of Association (MOA) and compliance with SECP regulations. A public company requires three members, while a private company needs at least two, with a single-member option available through an SMC.

Legal Requirements for Company Registration in Pakistan

Authorized Capital​: Maximum capital allowed, with no minimum requirement, based on fees.

Paid-up Capital: The amount shareholders have paid for shares.

Documents Required for Company Registration in Pakistan

For Ltd company registration with SECP, the following documents are required:

  1. Copies of CNICs/passports of promoters and chief executive (or passport for foreign directors)
  2. Memorandum of Association (MOA)
  3. Articles of Association (AOA)
  4. Proof of registered office (rent agreement or sale deed)
  5. SIM card registered in the name of a director
  6. Valid email ID for SECP communication
  7. Business registration certificate in Pakistan if setting up a branch or liaison office
  8. Company Incorporation Form-1
  9. Original paid challan showing the fee payment as per Schedule Seven of the Companies Act,.
  10. Power of attorney/authority letter (if required)
  11. Incorporation form

Additional Documentation for Foreign Directors

Foreign directors and subscribers must provide authenticated passports, Board Resolutions for shareholding, and certificates of incorporation from their home country, verified by Pakistani diplomatic missions or apostilled.

Company Registration Process in Pakistan

The following are the essential and basic steps for the company registration process in Pakistan with Securities and Exchange Commission of Pakistan (SECP).

1. Company Name Search

The first step in incorporation of business with SECP company registration is to search and reserve a company name online through SECP’s eServices portal or in physical form. The name must comply with the Companies Act, 2017 to avoid resemblance to existing companies or avoiding offensive terms.

2. Filing for Incorporation

After name approval, the incorporation application is filed with SECP, including the Memorandum and Articles of Association. The application must specify the company’s objectives and compliance with SECP’s model MOA and AOA formats for various sectors

3. Fee for Company Name Search in Pakistan

For online name search, the fee is 200, whereas, for physical application, it is 500. This can be paid through digital payments or by manual submissions which require a fee challan submission in the bank.

4. Processing Time

SECP offers same-day processing for applications submitted by noon, typically completing within four working hours as per the information provided on SECP website.

5. Certificate of Incorporation Pakistan

After successful submission and passing all the formalities, a formal certificate of incorporation is issued to the company that shows that the company now has its own legal status and is ready to commence business.

6. How LEX Can Help

M/s Legally-Ethically-Expertly (LEX) provides expert support for company registration in Pakistan. Our experienced corporate lawyers handle every step, from SECP name reservation to preparing essential documents like the Memorandum and Articles of Association, ensuring full regulatory compliance. Contact us for a seamless registration process backed by the latest legal insights.

Foreign Company Registration in Pakistan

It is governed under Section 435 of the Companies Act, 2017, linking with the Foreign Companies Incorporation Regulations, 2018. These legislations provides the procedures and requirements for setting up a foreign company in Pakistan.

Types of Foreign Offices

  1. Branch Office: A foreign company may open a branch office to fulfill its contractual obligations. However, branch offices is not allowed to conduct commercial or trading activities.
  2. Liaison Office: A foreign company may open its liaison office for promotional purposes only or to find new business opportunities. It can perform activities like technical support but it cannot engage in direct business activities.

Registration Process

In addition to typical limited company registration, this includes the following additional approvals and submissions:

  1. BOI Approval: Before applying to the Securities & Exchange Commission of Pakistan (SECP), foreign companies must secure approval from the Board of Investment (BOI). The permission covers the establishment of both branch and liaison offices.
  2. Document Submission: Certified documents, including the foreign company’s incorporation certificate, Board of Directors resolution, and required forms, are submitted online or at the SECP’s Business Centre.

Fees for Registration

The foreign company registration fee is Rs. 22,000 for offline submissions and Rs. 11,000 for online applications, as provided on the SECP website, with additional costs for name reservation and statutory filings.

National Tax Number (NTN) for Newly Incorporated Companies

SECP’s integration with the Federal Board of Revenue (FBR) simplifies tax registration by issuing an NTN automatically for newly incorporated companies. FBR receives company information from SECP’s portal and issues the NTN after verification.

Filing and Approval of Annual Financial Statements in Pakistan

Annual Financial Statements are critical documents that every company must prepare, sign, and file according to its classification and paid-up capital.

Types of Annual Financial Statements

  1. Annual Audited Financial Statements:
    • Mandatory Filing for: Listed companies, public companies, private companies with a paid-up capital above Rs. 10 million, and foreign companies.
  2. Annual Unaudited Financial Statements:
    • Mandatory Filing for: Private companies and SMCs with paid-up capital of up to Rs. 1 million (unless a subsidiary of a public company).

Quarterly Financial Statements for Listed Companies

Under Section 237, listed companies must prepare quarterly financial statements and file them electronically within 30 days for the first and third quarters and within 60 days for the second quarter. These statements must be available on the company’s website for members and filed with SECP via email and eServices.

Company Exit Policy in Pakistan

The exit policy refers to a formal dissolution procedure other than winding up. A company can file an application to strike its name off the register of companies under Companies (Easy Exit Regulations), 2014.

Following companies cannot apply:

  • Subsidiaries of listed companies
  • Foreign companies
  • Trade organizations (licensed under the Trade Organization Act, 2013)
  • Companies with outstanding liabilities (loans, taxes, utilities, or obligations to government or private entities)
  • Companies under investigation, enquiry, or court proceedings
  • Companies with management or shareholding disputes
  • Companies involved in illegal or fraudulent activities
  • Housing, real estate development, or real estate marketing companies
  • Companies soliciting public deposits with incomplete repayments or promised deliveries

Winding Up of a Company in Pakistan

The winding up or liquidation of a company is a process of ending a company’s legal existence. It may commence upon an order of court or a voluntary resolution by members of company

Process of Winding Up

Winding up may involves selling the company’s assets, settling debts (if any), and distributing any remaining assets among shareholders as per their shareholding ratio.

Types of Winding Up

  • Compulsory Winding Up: this winding-up is initiated by a court order. This commonly happens due to insolvency or bankruptcy.
  • Voluntary Winding Up: When shareholders or directors make decision to dissolve the company it is termed as voluntary winding up.

Legal Effect of Winding Up

On completion, the company ceases to exist and its legal status ends.

Conclusion

Establishing a business in Pakistan involves various steps and owners must have some legal understanding regarding structures, company types, and SECP regulations. At LEX, we hope this guide will empower you to make informed choices, building a compliant and resilient foundation for growth. Your business success—with LEX by your side!

Note:

M/s Legally-Ethically-Expertly (LEX), a leading law firm with experienced lawyers, provides this article’s information for public awareness through our website, lex.com.pk. We strive to offer valuable insights to the general public but emphasize that this content should not be considered legal advice. Additionally, please note that the information provided here may be outdated as laws are amended regularly or may contain human error; therefore, we recommend not relying solely on this content. For personalized guidance or the most up-to-date information, we encourage our valued readers to contact our expert family lawyers in Pakistan by calling or WhatsApp at +92-310-8888539 or emailing info@lex.com.pk. We are here to assist with tailored solutions.

Frequently Asked Legal Questions

What is a Company Limited by Shares?

A company where members’ liability is limited to unpaid amounts on shares, commonly seen in PVT LTD and public companies.

How Can I Check Company Registration Status?

The SECP portal provides tools to verify the company registration status and other details.

What is the company registration number in Pakistan?

It is the number mentioned on the certificate of incorporation. It is also often called as company registration number.

How to register a company in Pakistan online?

A company can be registered online in Pakistan by reserving a company name with SECP and submitting an application with the required documents. Upon approval and fee payment, SECP issues a Certificate of Incorporation, granting legal status.

How to register a private limited company in Pakistan?

Registering a private limited company in Pakistan involves reserving a unique company name through SECP, followed by submitting an incorporation application with necessary documents like the Memorandum and Articles of Association. Once approved and fees are paid, SECP provides a Certificate of Incorporation, officially establishing the company.

Submit Your Query

Note:

While we strive to provide accurate information, please note that the details in this article may contain human errors and are not meant to serve as legal opinion or advice. This content is purely for informational purposes. If you have a specific legal query or need further clarification, we warmly invite our valued readers to reach out to us by calling or WhatsApp at +92-310-8888539, or email at info@lex.com.pk. We are here to assist with tailored solutions.

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