How to register a company In Pakistan – Step By Step Guide
How to register a company In Pakistan – Step By Step Guide
Set up your Entity in Pakistan
Are you looking for incorporate your company in Pakistan? Pakistan is one of the most renowned Country in Asia in which to set up a new company. In Pakistan, legal affairs seem so difficult that we are forced to pay massive amounts of fees to experts whose businesses grow on the lack of knowledge of the general public.
A Company is a legal body where three or more persons are authorized to do business by subscribing their names to the Memorandum of Association and registered under Companies Ordinance, 1984.
The process of incorporation of a company takes place once the nature of business and the type of company has been decided.
The process of registration of a company is not complicated and if the rules set by the government of Pakistan are followed properly then one can easily register a company in Pakistan.
The registration process is taken care of by Securities and Exchange Commission of Pakistan (SECP). SECP is the only body who has the powers of company registration. Let us guide you through a simple process step by step:
Company Limited by Shares
Company limited by shares means a company having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them;
Company Limited by Guarantee
Company limited by guarantee means a company having the liability of its members limited by the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its winding up;
Public Limited Company
Any three or more persons associated for lawful purpose may, by subscribing their names to the Memorandum of Association and comply with all requirements of the ordinance may form a public limited Company.
Private Limited Company
Any one or more Persons associated for lawful purpose may, by subscribing their name to the Memorandum of Association and comply with all requirements of ordinance may form a private Limited Company.
Single Member Company
A single member company is a class of private company, limited by shares which is incorporated with one member, or whose membership is reduced to one person. It shall not issue invitation to the public to subscribe for any share of the company.
Incorporation of Company: Information and Procedure
The Process of Incorporation of a Company in Pakistan is very simple. By just following the guidelines provided by the Government of Pakistan you can register your company.
The registration process is taken care of by Securities and Exchange Commission of Pakistan (SECP), which is the only body who has the right to accept or reject an application.
All of the regulations and registrations are governed by the Companies Ordinance Act 1984. Here we will give you detailed step wise information about how to register a company in Pakistan.
Procedure for Manual Submission
Step 1: Seek approval on name of the company
The first step towards incorporation of a company is to seek the “availability of name” for the proposed company from the concerned registrar of companies.
Although, it sounds simple enough, but there are certain prohibitions and restrictions, the applicants have to look into while choosing a name for a company.
There is a complete guideline for choosing the name of the company. Any deceptive or inappropriate words will not be approved by the SECP and the validity of your proposed selection of name will be scrutinized.
Step 2: Pay fees Associated with incorporation and prepare documents for Registration
After receiving the Name Availability Certificate from SECP, the applicants have to file an application for incorporation of the company.
The fees associated with the process can be paid using the relevant bank form at designated branches of The Muslim Commercial Bank (MCB) in Pakistan. SECP then requires the applicant to submit the following documents:
- Declaration of compliance from the directors of the company (Form 1)
- Address of office’s location (Form 21)
- Particulars of directors, secretary, chief accountant, auditors and other (Form 29)
- Power of Attorney in favor of any person authorized to submit documents and liaison with the company registration office about different issues during company registration
- Copies of CNIC are of Directors and witness who signed the memorandum and articles of Association of the company undergoing registration
- Copies of the Memorandum and Articles of Association with each member’s signature, where:
Memorandum of Association explains the business sector of your company e.g. Institution, Travel agency, Trading or manufacturing, Supply or chain of stores. To put simply, MOA tells about the relationship of your company with the outside world.
Articles of Association lets know about the day-to-day proceedings within the company i.e. what role CEO and directors would play, business concerned meetings and the appointments of employees, in short- how the company will run.
Step 3: Obtain a digital signature and create a company Seal
The signature is granted by National Institutional Facilitation Technologies (NIFT) and can be obtained from the SECP online services.
After the certificate of incorporation is issued, the company representatives may be required to present a company seal, depending on the where the business head-quarters will be located or where business will commence.
Some states also require a corporation to have a corporate seal, which is also sometimes referred as company seal.
Step 4: Register for Income Tax, Sales and Professional Taxes
To register for Income tax, you must apply for a National Tax Number (NTN) at the tax facilitation of the Regional Tax Office (RTO) of the Federal Board of Revenue (FBR). The requirements for this application are:
- NTN form
- Proof of registration
- Memorandum and Articles of association
- Bank account number
- Copies of National Identity Cards (NICs) of companies’ Directors
- An attestation of business address
All of these are to be submitted at the nearest tax facilitation counter of the RTO in Pakistan. Sales tax, like the income tax can be registered for, by applying for a Sales Tax Number (STN) at the tax facilitation center of the Regional Tax Office (RTO) of the Federal Board of Revenue (FBR).
For the Professional tax, you’ll need to register with Excise and Taxation (ET) Department of the District.
Step 5: Register with ESSI and EOBI
Depending on the location of the business, the company must register with:
- Punjab Employees Social Security Institutions (PESSI)
- Sindh Employees Social Security Institution (SESSI)
- Baluchistan (BESSI) or (KPKESSI) for Khyber Pakhtunkhwa respectively.
Under the Employees Old Age Benefits Institution (EOBI), insured employees are entitled to a pension upon retirement, invalidity in the case of disability, old-age grant and survivor’s pension.
Every industry or a commercial establishment with five or more employees has to be registered with the Federal Employees Old-age Benefits Institution (EOBI).
If the Company name has been reserved successfully, the Company Incorporation facility will be available at this stage.
For incorporation of company process, please note that you will need to create separate User IDs for all proposed Subscribers, in order to obtain their digital signatures from NIFT http://www.nift.com.pk/.
After obtaining name availability, User should use the “Manage Company Users” button available on the top right hand side of the web page to create separate/additional User IDs. User will click on the process of Incorporation of Company and following information will need to be entered by the user:
- Enter the Declarant and compulsory information about the declarant/ company representative. A declarant can be any person authorized to represent the proposed company by the Owners/Board of Directors, any employee or even the director could be chosen for this responsibility.
- Director/Subscriber, detailed data regarding Board of Directors and Subscribers
- Enter the Director/Subscriber and detailed data regarding Board of Directors and Subscribers.
- Enter Company information, registered office address, sector-wise classification, share capital, company objects, contact number/cell number and email address.
- Signatory, details of signatory.
- Press Continue link, process document listing page will be displayed, containing the following links:
- Update Form(s) Data (User has an option to amend the details already entered, if required before submitting the process)
- View Forms (to view filled out forms)
- View company profile form (to view company profile)
- Fill New Attachment Form (to attach required documents)
- Fill New Attachment Form Articles of Association (to attach Articles of Association)
- Fill New Attachment Form Memorandum of Association (to attach Memorandum of Association)
- Fill New Bank Challan (at this stage challan should only be saved and not printed)
- Sign Forms (for digitally signing application by all subscribers)
After digital signatures, “Submit to SECP” button will become active and clicking this button will submit documents/application to the SECP and a process reference number will be generated. Click on submitted processes to print the challan form. This is then submitted into bank.
The Incorporation of Company is just a few steps away. You can now rely on Tax Care for your Company registration under the complete guidance of our experienced team of Attorneys.