[vc_row][vc_column width=”3/4″][vc_column_text]So far, we’ve discussed about Business Pitch and Business Plans that were limited to startup process. We now move onto a very crucial prospect i.e. of registration of a company – particularly in Pakistan. It is the last of endeavors in the course of business settlement, and for some entrepreneurs and founders; one of the ultimate goals. Therefore, it requires a broad-comprehensive view on the subject of registration.
Hence, for your ease of understanding, we’ve simplified the procedures with a mindset that reader would have a better understanding of each necessary step, without having to dive into the complexity of business. However, there are certain rules and ordinance which is followed by the Security and Exchange Commission of Pakistan. So, the applicants must comply with the incorporation process as under:
Name your company and Get it approved
While choosing the name for your company – make sure, not to use the Prohibited terms. Any deceptive or inappropriate words will not be approved by the SECP and the Validity of your proposed selection of name will be scrutinized. So as to assure that, it is neither identical with the existing companies’ name nor closely resembling. For that reason, you must abide by the criteria laid down for naming the company, to get the possible approval by SECP.
Pay the fees for incorporation and Register your company
A name availability certificate is required from SECP and for the purpose you may file application. The fees for which could be paid using any bank challans at designated Muslim Commercial Banks (MCB). After this, you come to a level of registration where the SECP ask you to submit the following documents:
- Declaration of compliance
- Identification of office’s location
- Particulars of directors, secretary, chief accountant, auditors and other
- Copies of the Memorandum and Articles of Association with each member’s signature
A quick brief-on:
Memorandum of Association explains your business sector of the 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.
Get Digital Signature and Make a Company Seal
The signature is granted by National Institutional Facilitation Technologies (NIFT) and can be obtained using E-services of SECP. After the certificate of incorporation is issued, you may be required to present a company seal, depending on which city you’re going to start your business in. On the necessity point, it wouldn’t be wrong to mention that some states require a corporation to have a corporate seal, which is also sometimes referred as company seal.
Register for Income, Sales and Professional Taxes
To register for Income tax, you’re supposed to 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 centre 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.
Register with ESSI and EOBI
Depending on the location of your business, you’ll either need to register with
- Punjab Employees Social Security Institutions (PESSI)
- Sindh Employees Social Security Institution (SESSI)
- Likewise (BESSI) or (KPKESSI) for Balochistan and 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).
Register with the Labor Department of the District
To safeguard the Labor standard of the workers, every establishment other than one man shop required to be registered with the District Chief Inspector of the Labor department in each district. For registration, employer must submit the application form A accompanied with Bank challan.
That was a detailed summary, a bit boring yet highly essential to understand the establishment procedure of your viable business idea or plan. Want to know about firm registration and partnership firm registration in Pakistan? Let us know via email at inbox[at]techjuice.pk. We’ll sure get back here with an interesting and informative article.[/vc_column_text][vc_btn title=”Apply For Company Registration in Pakistan” style=”flat” color=”theme_style_3″ size=”lg” i_align=”right” i_icon_fontawesome=”fas fa-angle-right” add_icon=”true” link=”url:https%3A%2F%2Funitedlegalexperts.com%2Fcountry-registration%2Fcompany-registration-pakistan%2Fpakistan-package%2F|title:Company%20Registration%20Packages%20in%20Pakistan|target:%20_blank|”][stm_spacing lg_spacing=”50″ md_spacing=”50″ sm_spacing=”30″ xs_spacing=”30″][/vc_column][vc_column width=”1/4″][vc_single_image image=”4719″ img_size=”251×145″ style=”vc_box_shadow_border”][stm_sidebar sidebar=”527″][/vc_column][/vc_row][vc_row full_width=”stretch_row” el_class=”fixed_bg” css=”.vc_custom_1592470725498{background-image: url(https://unitedlegalexperts.com/wp-content/uploads/2019/10/law-firm.jpg?id=1470) !important;}”][vc_column][stm_spacing lg_spacing=”30″ md_spacing=”30″ sm_spacing=”20″ xs_spacing=”20″][vc_custom_heading text=”FAQs” font_container=”tag:h3|text_align:left|color:%23ffffff” use_theme_fonts=”yes”][vc_tta_accordion color=”white” c_position=”right” active_section=”1″][vc_tta_section title=”What is meant by Private Company?” tab_id=”1592470800213-83bcbd7d-b973″][vc_column_text]According to Companies Ordinance, 1984 private company means a company, which, by its articles, restricts the right to transfer its shares, if any. Limits the number of its members to fifty not including persons who are in the employment of the company and prohibits any invitation to the public to subscribe for the shares, if any, or debentures of the company.[/vc_column_text][/vc_tta_section][vc_tta_section title=”Which law is applicable for incorporation of companies?” tab_id=”1592470800255-5644fd9e-14e4″][vc_column_text]Relevant laws are Companies Ordinance, 1984, Companies (General Provisions and Forms) Rules, 1985, Single Member Companies Rules, 2003 and Code of Corporate Governance for limited companies.[/vc_column_text][/vc_tta_section][vc_tta_section title=”How many types of Companies are there?” tab_id=”1592471058072-dcfcf871-3a6b”][vc_column_text]Companies Ordinance, 1984 mentions three types of companies i.e. company limited by shares, company limited by guarantee and unlimited company. Companies which may be registered in the mentioned categories in Pakistan are a single member company, a private limited company, a public limited company; which may be listed or unlisted and a foreign company.[/vc_column_text][/vc_tta_section][vc_tta_section title=”What is Minimum number of members for forming a company?” tab_id=”1592471110409-0755e24d-8e97″][vc_column_text]A public unlisted company must have at least three members/directors whereas the company listed at stock exchange must have at least seven members/directors. A private company may have only two members/directors and a single member company can be formed with one chief executive and a company secretary.[/vc_column_text][/vc_tta_section][vc_tta_section title=”According to Company Law what is Special Resolution?” tab_id=”1592471137538-a849003b-32d0″][vc_column_text]According to Companies Ordinance, 1984 Special Resolution means a resolution which has been passed by a majority of not less than three-fourths of such members entitled to vote as are present in person or by proxy at a general meeting of which not less than twenty-one days notice specifying the intention to propose the resolution as a special resolution has been duly given. Provided that, if all the members entitled to attend and vote at any such meeting so agree, a resolution may be proposed and passed as a special resolution at a meeting of which less than twenty-one days notice has been given.[/vc_column_text][/vc_tta_section][vc_tta_section title=”What is Memorandum of Association of a company?” tab_id=”1592471214986-9e473b9d-25ae”][vc_column_text]Memorandum of Association primarily specifies the framework of company’s objectives and capital boundaries. It is the constitution of a company, and is its main document. A company cannot incorporate without a memorandum of association. It provides information about a company, its financial structure, and its functions. Memorandum of Association governs a company’s business operations by highlighting clauses of what a company can do and what it cannot. It includes Name clause, Registered Office Clause, Object Clause, Liabilities Clause, and Authorized Capital Clause. The object clauses cannot be changed or enlarged without the approval of Securities and Exchange Commission of Pakistan.[/vc_column_text][/vc_tta_section][vc_tta_section title=”What is Articles of Association?” tab_id=”1592471341257-203c9613-bf8b”][vc_column_text]Articles of Association highlight internal regulations for the management of the company. It states the roles and functions of the company’s management. Articles of Association govern company management’s operations they transcribes rules for conducting its daily business in accordance with applicable laws e.g. transfer and transmission of shares, mode of alteration in capital, holding of meetings, voting, powers and duties of directors and chief executive, distribution of dividends, capitalization of profits and reserves, preparation of accounts, winding up, etc.[/vc_column_text][/vc_tta_section][vc_tta_section title=”Can Articles of Association be altered after incorporation?” tab_id=”1592471484421-f6a40686-e86c”][vc_column_text]Yes, a company can alter its articles of association anytime after passing of a special resolution by the shareholders.[/vc_column_text][/vc_tta_section][vc_tta_section title=”Can I convert my sole proprietor business into a company?” tab_id=”1592471513590-980ccb8c-7e60″][vc_column_text]Yes, sole proprietor business can be converted into sole proprietor company or a private limited company.[/vc_column_text][/vc_tta_section][vc_tta_section title=”To start a small business which forms should I adopt?” tab_id=”1592471548439-e8471ae2-519a”][vc_column_text]You can adopt any one option that is; by becoming a sole proprietor, by forming a single member company, by forming a partnership and you can also form a private limited company.[/vc_column_text][/vc_tta_section][vc_tta_section title=”Can a foreigner be a director in a Pakistani Company?” tab_id=”1592487817001-607c3d14-fbf7″][vc_column_text]Yes, foreigner can be a director of a Pakistani Company after compliance with the Foreign Exchange Regulations.[/vc_column_text][/vc_tta_section][vc_tta_section title=”How does a director resign from a Private Limited Company?” tab_id=”1592487855450-e5188911-67a8″][vc_column_text]In Private Limited Company, a director can resign anytime subject to the clearance of any liability against him.[/vc_column_text][/vc_tta_section][vc_tta_section title=”What is the minimum paid-up capital of a Private Limited Company?” tab_id=”1592487857998-6660ff25-d996″][vc_column_text]The minimum paid up capital at the time of incorporation of a private limited company has to be Pakistani Rupees 1, 00,000. There is no upper limit on having the authorized capital and the paid up capital. Capital can be increased any time.[/vc_column_text][/vc_tta_section][vc_tta_section title=”What is the difference between authorized capital and paid up capital?” tab_id=”1592487976900-c5e276f9-4f89″][vc_column_text]The authorized capital is the limit up to which the directors are competent to issue shares. Paid up and subscribe capital means the capital actually issued in favor of the directors/shareholders within the limits of authorized capital.[/vc_column_text][/vc_tta_section][vc_tta_section title=”In future I am thinking to increase paid-up capital of my company is it possible?” tab_id=”1592488004588-883781b4-0c6f”][vc_column_text] Yes, you can increase but subject to the compliance of the requirement of the Companies Ordinance, 1984.[/vc_column_text][/vc_tta_section][vc_tta_section title=”What are the requirements for a foreign company opening a branch in Pakistan?” tab_id=”1592488040006-f498e8e1-79e3″][vc_column_text]Foreign company can establish a principal place of business in Pakistan after complying with the legal requirements laid down under section 452 to 460 of the Companies Ordinance, 1984.[/vc_column_text][/vc_tta_section][vc_tta_section title=”Can I change my company name after incorporation?” tab_id=”1592488069995-25e93fdb-fc48″][vc_column_text]Yes, a company name can be changed any time after the incorporation, by passing a special resolution by the members and certificate of change of name is issued by the Securities and Exchange Commission of Pakistan in whose jurisdiction the registered office of the company is situated.[/vc_column_text][/vc_tta_section][vc_tta_section title=”I do not live in Pakistan Can I still set up a new company?” tab_id=”1592488100361-8ba07333-0331″][vc_column_text]Yes, you can set up a company. If a Chief Executive/director resides outside Pakistan for more than three months then he can appoint an alternate director in his place.[/vc_column_text][/vc_tta_section][vc_tta_section title=”Can I choose any name I want for my new company?” tab_id=”1592488135357-4afae152-0b26″][vc_column_text]You can choose any name but subject to the approval of the Securities & Exchange Commission of Pakistan.[/vc_column_text][/vc_tta_section][vc_tta_section title=”What are non-profit companies?” tab_id=”1592488175990-2919856d-ffc4″][vc_column_text]Non-profit companies are generally formed with the objective of promoting art, science, social services, etc. and the members are prohibited from receiving any dividend. Such companies are exempted from the requirements of using the word “limited” at the end of the name and are authorized to operate under a license issued by the regulator.[/vc_column_text][/vc_tta_section][vc_tta_section title=”Are there any restrictions on foreigners who wish to do business in Pakistan?” tab_id=”1592488219577-35222bfc-43a2″][vc_column_text]There is no restriction on foreigners to do business in Pakistan.[/vc_column_text][/vc_tta_section][vc_tta_section title=”Do foreigners need a Pakistani national to form a company?” tab_id=”1592488268965-b2e5268b-518e”][vc_column_text]Foreigner can form a company with 100% equity subject to the approval of Board of Investment, Government of Pakistan otherwise they must have someone from Pakistan to be a director.[/vc_column_text][/vc_tta_section][vc_tta_section title=”Does a company needs separate National Tax Number?” tab_id=”1592488356177-3ea94255-2e0e”][vc_column_text]Yes, every company is assigned a national tax number without it a company cannot file its return. Documents which company requires for national tax number are photocopies of computer national identity card of all the directors or passport (in case of foreigner), incorporation certificate and application for national tax number by individual director in case they do not have national tax number.[/vc_column_text][/vc_tta_section][vc_tta_section title=”What are taxation rates for companies in the Pakistan?” tab_id=”1592488358462-660f3799-09d0″][vc_column_text]The income tax payable by the companies in Pakistan is approximately 35% of the net profit of the company.[/vc_column_text][/vc_tta_section][/vc_tta_accordion][stm_spacing lg_spacing=”40″ md_spacing=”30″ sm_spacing=”20″ xs_spacing=”20″][/vc_column][/vc_row][vc_row full_width=”stretch_row” css=”.vc_custom_1459505959648{margin-bottom: -60px !important;}” el_class=”third_bg_color”][vc_column][vc_cta h2=”Get best advise for your business with NO FEE!” h2_font_container=”font_size:20px|color:%231c1c1c|line_height:24px” h2_use_theme_fonts=”yes” shape=”square” style=”flat” add_button=”right” btn_title=”Contact Us” btn_style=”flat” btn_color=”theme_style_2″ btn_size=”lg” btn_align=”right” use_custom_fonts_h2=”true” btn_link=”url:https%3A%2F%2Funitedlegalexperts.com%2Fcontact-us%2F|title:Contact%20us||” el_class=”third_bg_color” css=”.vc_custom_1589976754355{margin-bottom: 0px !important;}”][/vc_cta][/vc_column][/vc_row]