COMPANY REGISTRATION IN PAKISTAN

Company registration in Pakistan

Company registration in Pakistan

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Company Registration in Pakistan: A Step-by-Step Guide


Starting a business in Pakistan involves several legal and administrative steps, one of the most important being company registration. Registering your company ensures that your business is recognized legally and provides a framework for operations, taxation, and compliance with regulations. This guide walks you through the essential steps and requirements for registering a company in Pakistan.



Types of Companies in Pakistan


Before registering a company, it's essential to determine the type of business entity you wish to form. The primary types of companies that can be registered in Pakistan are:

  1. Private Limited Company
    This is the most common type of company in Pakistan, offering limited liability to shareholders. The number of shareholders ranges from 2 to 50.

  2. Public Limited Company
    A public limited company can offer shares to the public, and its minimum number of members is 7.

  3. Single Member Company (SMC)
    This is a type of private limited company that allows for a single shareholder. It's ideal for individual entrepreneurs who want the benefits of limited liability.

  4. Non-Profit Company
    A non-profit company is established for charitable purposes, and its profits cannot be distributed among members.

  5. Foreign Company
    Foreign companies wishing to do business in Pakistan can register as a subsidiary or branch of the parent company abroad.





Steps for Company Registration in Pakistan



  1. Name Reservation

    The first step in company registration is choosing a unique name for your company. You need to ensure that your desired name is not already in use or too similar to an existing company. The name should also comply with the guidelines provided by the Securities and Exchange Commission of Pakistan (SECP).

    • Process:
      Visit the SECP's e-Services Portal and apply for Name Reservation. You can search for available names and submit a request online. Typically, it takes 1-2 business days for approval. Click here



  2. Prepare Incorporation Documents

    Once your company name is reserved, you will need to prepare the required incorporation documents. These documents generally include:

    • Memorandum of Association (MOA): Outlines the company's objectives, activities, and scope of operations.

    • Articles of Association (AOA): Specifies the rules for the internal management of the company.

    • Form 1 (Declaration of Compliance): A declaration that all the legal requirements for company formation have been met.

    • Form 21 (Notice of Situation of Registered Office): Specifies the company's registered office address.

    • Form 29 (Particulars of Directors): Details the directors of the company.



  3. Register with the SECP (Securities and Exchange Commission of Pakistan)

    After preparing the necessary documents, you need to submit them to the SECP for approval and registration. The registration process is now entirely online through the SECP's e-Services Portal.

    • Documents Required:

      • CNIC or copyright copies of directors

      • Proof of office address (utility bill or lease agreement)

      • National Tax Number (NTN) of the company (to be obtained later)

      • Director’s details and shareholding structure



    • Process:

      • Submit all forms and documents through the SECP portal.

      • Pay the prescribed registration fees (fee varies depending on the company's authorized capital).

      • Once submitted, the SECP will process the registration, and you will receive a Certificate of Incorporation. This certificate is your company’s legal proof of existence.





  4. Obtain National Tax Number (NTN)

    After the company is incorporated, you must obtain a National Tax Number (NTN) from the Federal Board of Revenue (FBR). The NTN is required for tax filings, hiring employees, and obtaining a sales tax registration if applicable.

    • Process:
      Visit the FBR website or go to the local FBR office to register for an NTN. You'll need your company’s incorporation certificate, proof of address, and CNIC of the directors.



  5. Register for Sales Tax (if applicable)

    If your business involves the sale of taxable goods or services, you must also register for sales tax with the FBR. Sales tax registration is mandatory for companies involved in manufacturing or trading certain goods and services.

    • Process:
      Apply for a Sales Tax Registration with the FBR by providing your NTN, business details, and relevant documents. Sales tax registration allows you to collect tax from customers and claim input tax credits on purchases.



  6. Register for Social Security and EOBI (Employees Old-Age Benefits Institution)

    If your company plans to hire employees, you must also register with the Social Security Department and EOBI. These registrations ensure that your employees receive the benefits of social security and retirement funds.

    • Process:
      Register with the local social security office for coverage of employees under the social security scheme and provide contributions to the EOBI for employee pensions and benefits.



  7. Open a Corporate Bank Account

    After registering your company, the next step is to open a corporate bank account in the name of the company. You’ll need the following documents:

    • Copy of the Certificate of Incorporation

    • NTN certificate

    • Proof of the registered office address

    • Copies of the director's CNICs







Documents Required for Company Registration


Here’s a summary of the essential documents required for company registration in Pakistan:

  1. Form 1 – Declaration of Compliance

  2. Form 21 – Notice of the Registered Office

  3. Form 29 – Particulars of Directors

  4. Memorandum of Association (MOA)

  5. Articles of Association (AOA)

  6. Copy of CNIC or copyright of directors and shareholders

  7. Proof of Address (e.g., utility bill or lease agreement)

  8. National Tax Number (NTN) for the company





Benefits of Registering a Company in Pakistan



  1. Legal Protection and Limited Liability:
    Registering your business as a company provides legal protection, limiting the personal liability of directors and shareholders. This means that the company’s debts are separate from personal assets.

  2. Credibility and Trust:
    A registered company has greater credibility with clients, suppliers, and investors. It shows that your business is officially recognized and operates in compliance with the law.

  3. Tax Benefits:
    Registered companies can avail themselves of various tax benefits, including tax deductions, credits, and exemptions. They also have access to government grants and incentives.

  4. Access to Funding:
    Banks and investors are more likely to fund registered companies, as they are legally recognized entities with a structure for accountability.

  5. Brand Protection:
    Registering your company protects your brand and business name, preventing others from using the same or a confusingly similar name.





Conclusion


Registering a company in Pakistan is a straightforward process when you follow the correct steps. By registering your company with the Securities and Exchange Commission of Pakistan (SECP) and obtaining all necessary certifications, you create a solid foundation for your business operations. This not only ensures compliance with legal requirements but also enhances your business’s credibility and growth potential. Whether you’re an entrepreneur starting a small business or an established organization expanding, registering your company is a crucial first step toward success.

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