How to Register a Business Company in Pakistan? (Step by Step Guide)

eCommerce | August 1, 2023
Company's Registration

Registering a business company in Pakistan is an essential step towards establishing a legal and recognized entity that can engage in commercial activities. The process may seem daunting for first-time entrepreneurs, but with the right guidance and understanding of the legal requirements, it can be a smooth and straightforward process.

In this blog we tried to discuss a comprehensive guide on how to register a business company in Pakistan, covering the necessary steps and documents to ensure a successful registration.

Step 1: Choose the Type of Business Entity

The first step in registering a business company in Pakistan is to determine the type of business entity that best suits your needs. The most common types of business entities in Pakistan are following.

1. Sole Proprietorship: This is the simplest form of business, where the owner is the sole operator and responsible for all liabilities. A sole proprietorship is a business owned and operated by one person. The owner is personally liable for all debts and obligations of the business. Easy to start and operate, and do not require any formal government registration.

2. Partnership: A partnership is a business structure in which two or more people agree to share ownership and control of a business. Partners share the profits and losses of the business, and they are jointly liable for the business’s debts. In other words we can say a business owned and operated by two or more individuals, who share profits and responsibilities.

3. Private Limited Company: A private limited company (Ltd.) is a type of business entity that is owned by shareholders. The liability of each shareholder is limited to the amount they have invested in the company, so if the company goes bankrupt, the shareholders’ personal assets are not at risk. Private limited companies are not allowed to offer their shares to the public, so they are typically smaller businesses.

4. Single Member Company (SMC): SMCs are a relatively new type of company in Pakistan, having been introduced in 2003. A Single Member Company (SMC) is a private company that has only one member or director. It is a type of limited liability company, which means that the member’s liability for the company’s debts is limited to the amount of their investment in the company.

5. Public Limited Company: A public limited company (PLC) is a type of company that is allowed to offer its shares for sale to the public. This means that anyone can buy shares in the company, and the company’s shares are traded on a stock exchange.

Choose the Type of Business Entity

Step 2: Name Reservation

Once you have decided on the type of business entity, the next crucial step is to select and reserve a unique name for your company. The name should not be identical or closely resemble any existing company in Pakistan to avoid potential legal issues.

The Securities and Exchange Commission of Pakistan (SECP) is responsible for approving and reserving company names. You can apply for name reservation online through the SECP eServices portal.

Name Reservation

Step 3: Prepare the Required Documents

Before proceeding with the registration process, you need to gather the necessary documents, which may vary based on the type of business entity. Generally, the following documents are required:

1. Memorandum of Association (MOA): This document outlines the company’s objectives, scope of business activities, and the relationship between shareholders and the company.

2. Articles of Association (AOA): A document defining the rules and regulations that govern the internal management of the company.

3. Form 1: Declaration of compliance with the requirements of the Companies Ordinance.

4. NTN (National Tax Number) Certificate: Obtained from the Federal Board of Revenue (FBR) after registering for income tax.

5. CNIC (Computerized National Identity Card) copies of the company directors and shareholders.

6. Proof of registered office address.

Prepare the Required Documents

Step 4: Company Registration with SECP

Once you have gathered the required documents, you can proceed with the registration process with the SECP. The process involves submitting the necessary documents and paying the registration fee. The fee may vary based on the company’s authorized share capital.

Company Registration with SECP

Step 5: Obtain Business Licenses and Permits

After the company registration, depending on the nature of your business, you may need specific licenses and permits to operate legally in Pakistan. These licenses could be from local or provincial authorities, and it is essential to identify the relevant ones for your business.

Registering a business company in Pakistan involves careful planning, compliance with legal requirements, and patience. By following the steps mentioned in this comprehensive guide, you can navigate the registration process with confidence.

Remember to seek professional advice if needed, and ensure that your business complies with all regulations to set a solid foundation for success. With a registered company, you can enjoy the benefits of operating legally, gaining access to financial services, and building trust among customers and partners.