It is very easy to set up a private limited company in Pakistan; however, people generally don’t know registration procedure. There are large numbers of law firms working in the country to provide consultancy for incorporation but it is always good to have little knowledge about processes involved in registration.
In Pakistan, private limited companies are incorporated and regulated by the Companies Ordinance, 1984 while Securities and Exchange Commissioner of Pakistan(SECP) is a regulatory authority established for regulation of stock markets and the Companies ordinance, 1984. One of the important functions of the Commission is the registration/incorporation of public and private limited companies. Therefore, people who want to get their private limited companies registered are supposed to apply to the commission. The commission issues incorporation certificate when all requirements are met by promoter(s) as per law.
Following steps are involved in incorporation process. The explanation is oversimplified keeping in view that reader of this article is a common man who doesn’t have background of law or business administration.
1. You are going to register a company and the first step is to name that company. The SECP does not allow choosing name that is otherwise inappropriate, deceptive or designed to exploit or offend the religious susceptibilities of the people and neither is identical nor closely resembling with the name of an existing company. Moreover, SECP does not allow including prohibited words in name of the company and if you want to know about these words click here. After selection of name, make sure this name is valid according to criteria laid down by the SECP. Click here to check validity of proposed name of your private limited company.
2. Before applying for registration/incorporation you are required to get name availability certificate from SECP. You may file application before SECP for the purpose and application fee is Rs. 200 & Rs. 500 for online and offline application respectively. SECP will issue a certificate to you regarding availability and validity of proposed name of your company.
3. Now, at this step you are advised to decide authorized capital or share capital of your company. It means total investment you have to run your business. Registration fee is based on total share capital and fee calculator will help you in calculating the same.
4. Start preparing your documents now. You need copies of National Identity Cards (NICs) of each subscriber (you may say “shareholder”), four printed copies of Memorandum of Association and Articles of Association, Form I, Form 21 & Form 29, original paid challan evidencing payment of fee in any of authorized branches of MCB bank limited and authorization of sponsors in favor of a person to make good the deficiencies, if any, pointed out by the Registrar in any documents submitted for incorporation/registration.
5. For understanding purposes, I would like to explain that Memorandum of Association tells about business and sector of the company e.g. travel agency, educational institution, trading, supplies, chain of stores, manufacturing of cement etc. In other words Memorandum of Association tells about relationship between your company and outside.
On the other hand, Articles of Association tells about the day-to-day working of the company i.e. how the company will run, how CEO and directors will be appointed and about Annual General Meeting (AGM) of the company etc.
You may download samples/templates of Memorandum and Articles of Association by clicking here and submit these to SECP after necessary modifications/ amendments.
6. Form 1 is required for declaration of applicant for incorporation, Form 21 is a notice for situation of registered office of your company and Form 29 is required to state particulars of directors, chief executive, company secretary etc. Download these necessary forms by clicking here.
Submit required documents to SECP and the will take 7-14 days to scrutinize documents. If the find any mistake/omission they will inform you and you may re-submit after correcting the mistake pointed out by the commission. At end, the commission will issue incorporation certificate to you. Good luck for your business. However, if you know advantages and disadvantages of formation of company in Pakistan, click here
If you want more information or help regarding registration of a private limited company in Pakistan you may mail me at firstname.lastname@example.org , I will feel pride to assist you.
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