How to Register a Company in Pakistan: A Practical Guide

You register a company in Pakistan by reserving a name and filing incorporation documents with the Securities and Exchange Commission of Pakistan (SECP), almost always online through its eServices portal. When the registrar is satisfied, a certificate of incorporation is issued and the company exists as a separate legal person.

The filing is the easy part. What decides whether the company is actually ready to trade is the thinking done before it (which structure, which articles, who holds the shares) and the tax, banking and housekeeping work done after.

The Companies Act 2017 offers several kinds of company, and other statutes give you alternatives. Three questions usually settle the choice: who will own the business, how will it be funded, and how much protection do the owners need from its debts?

• Private limited company: the usual choice for owner-managed businesses and startups. Liability is limited and share transfers are restricted.
• Single member company: a private company with one shareholder, which suits a sole founder who still wants limited liability.
• Public company: for businesses expecting wider ownership or a listing. Governance and disclosure obligations are heavier.
• Limited liability partnership: formed under the Limited Liability Partnership Act 2017 and often used by professional and advisory firms.
• Partnership or sole proprietorship: quicker to set up, but the owners and the business are not legally separate.

Foreign shareholders, a regulated line of business or a planned investment round can each change the answer. Raise them before anything is filed, because restructuring a company after incorporation takes far more effort than getting it right first.

Your first formal step is an application to the SECP for the availability of the proposed name. The registrar will refuse a name that is identical or too close to an existing company, that is misleading, or that uses restricted words without the required approvals.

• Shortlist several names and rank them.
• Steer clear of words such as banking or insurance unless the business will hold the relevant licence.
• Run a trade mark check as well. SECP approval of a name is not trade mark clearance.
• Use the reserved name within the period allowed, or the reservation may lapse.

Rejections usually come with reasons. Unless the original name carries real commercial value, moving to a sensible alternative is normally quicker than contesting the decision.

With the name reserved, the incorporation application goes in online, together with the constitutional documents and particulars of the subscribers and directors. In practice the work runs in this order.

1. Set up eServices user accounts for the people who will sign and submit the filing.
2. Prepare the memorandum and articles of association. Adapt the standard forms or have bespoke articles drafted.
3. Enter subscriber, director and share capital details and upload the supporting papers.
4. Pay the applicable fee and submit.
5. Answer any observations from the registrar until the certificate of incorporation issues.

Documents usually required

• CNIC copies for Pakistani subscribers and directors, or passport copies for foreign nationals.
• The memorandum and articles of association.
• Consents of the proposed directors and the registered office address.
• If a subscriber is itself a company, its board resolution and constitutional documents.
• Any approval needed for regulated objects or foreign participation.

Foreign subscribers or directors bring an extra step. Depending on the regulations in force, the application may go for security clearance before or after incorporation. Papers signed abroad often need notarisation and attestation too, and that time should be built into the plan from the start.

A new company picks up obligations the day it is incorporated. We treat the items below as part of the incorporation project itself, since leaving them for later tends to cause trouble with banks, the tax authorities and the company's first customers.

• National Tax Number: register the company with the Federal Board of Revenue through IRIS. Banks and most suppliers will ask for it.
• Bank account: open a corporate account and expect the bank to run its own checks on the company, its directors and its beneficial owners.
• Statutory registers: keep registers of members, directors and beneficial ownership, and minute board and general meetings.
• Share certificates: issue them to the subscribers within the prescribed time.
• Other registrations: look at federal and provincial sales tax, professional tax and, once staff are hired, EOBI and provincial social security.

• Adopting standard articles without thinking about founder exits, share transfers or investor rights.
• Writing objects that are too narrow, or that accidentally describe a regulated activity.
• Putting nominee shareholders or directors on record without documenting the real arrangement.
• Recording beneficial ownership incorrectly.
• Putting off tax registration, then finding the bank account and invoicing held up.
• Assuming the SECP name gives exclusive rights to the brand.

Where there is more than one founder, sign a shareholders' agreement at the outset, while everyone is still on good terms. It can cover what the articles often leave open: vesting of founder shares, deadlock on the board, transfer restrictions and what happens when a founder walks away.

Each of these is cheap to fix at incorporation. Once the company has staff, contracts and investors, unwinding them is slow and expensive.

Sutra Law advises founders, family businesses and foreign investors on structuring and incorporating companies across Pakistan. We can help you pick the vehicle, draft the memorandum and articles, handle the SECP filing and complete the tax and corporate registrations that follow.

Before you start, have CNIC or passport copies for everyone involved, a shortlist of names, the agreed shareholding and a short description of what the business will do. If foreign investors or a regulated activity are part of the plan, speak to a lawyer before the name application, not after the registrar raises a query.