the presentation is about the company incorporation and it has possible legal structure of doing business that is required for Pakistan is included. Moreover, it has also steps of partnership and sole proprietorship that are required for registration. It has also included the private and public limited companies companies and Co incorporation& Compliance Department, Company Law Division.

1. Possible legal structures of
doing Business in Pakistan
PREPARED BY:
RAHAT HIMMAT ALI

2. Legal Business Structures in Pakistan
Business
Structures
Attributes
Sole
Proprietorship
Sole proprietors are self-employed for tax purposes and do not need any formal constitution. They have to prepare
accounts as the basis of profits to be included in the Annual Income Tax Return.
Partnership If a partnership is formed, partners are individually considered self-employed for tax purposes with profits allocated in
agreed profit sharing ratios.
Limited
Company
In case of a limited company, liability of the owners is limited. Broadly, there are two possible forms of limited companies
i.e. Public and Private. Limited Companies are incorporated under Companies Act 1984. It is a requirement for a
to maintain a register with Securities and Exchange Commission of Pakistan (SECP), including filing of annual returns for
director(s) and shareholder(s).
Public Limited Company:
 Any Seven persons associated for lawful purpose may, by subscribing their names to the Memorandum of
and complying with the requirements of the Companies Ordinance form a public company.
 All public companies (including associations not for profit and companies Limited by guarantees) are required to file
annual audited accounts with Registrar
 Only Public Limited companies are eligible to get listed in the stock exchange.
Private Limited Company:
 Any two or more persons so associated may, in like manner, form a private company. If only one member forms a
private company, it is called a single member private company.
 Private companies having share capital of PKR 7.5 Million or more are required to file annual audited accounts with
Registrar

3. Steps for Sole Proprietorship
Registration
 Following are the main steps to start a sole proprietorship business:
 This is quite easy however, instead of doing it yourself, get a tax consultant or lawyer to do it
for you, it is not expensive. The following steps need to be taken
 Initially we have to finalize the name of the company.
 Prepared the list of basic stationary company letter head, visiting cards.
 Preparing business stamp
 Bank account opening with account title of sole proprietor business. Sole proprietor
signature and stamp will be required on the letterhead by the bank manager.
 Acquire the bank statement of newly bank account.
 After that Apply for National Tax Number (NTN) certificate. For applying NTN Bank account
number and bank statement will be required with computerize ID card of sole proprietor. If
you are on a job, you already have a NTN (National Tax Number). No need to get a new NTN
number if you already have.

4. Steps for Partnership Registration
 Procedures involved in registration of Partnerships:
Partnership registration is not compulsory by any law but it is better to do so if individuals have agreed to work jointly. A
partnership may be registered with the Registrar of Firms of an area where the office of the firm is located or proposed to
be situated. In order to register business as partnership minimum two persons and following information is required:
Requirements:
 Each person’s – Full Name, Father or Husband Name, Residential Address and Occupation.
 Copy of the National Identity Cards of each partner.
 Partnership deed on stamp paper is also required.
 Proof of the address of partnership business, usually utility bills – could be of electricity.
 If the address of the partnership business is rented then rent deed is required
 Copy of the original receipt of Partnership fee deposited in the National Bank of Pakistan.
 Signature of all the partners in partnershipfirm business in presence of a registrar or an authorized officer.

5. Steps for Partnership Registration
 Additional Requirements:
 National Tax Number from Federal Board of Revenue.
 Bank Account in the name of Business.
 Accounting records of the partnership business, a properly maintained profit and loss
account and balance sheet.
 Advance payment of Income Tax.
 Registration from any other authority if required under any law of business to be
undertaken.
 Partnership deed: in other words, a partnership agreement is a document signed by all
partners which consists of mutual rights, obligations, regulations and conditions
concerning the internal management of partnership organization.
Dissolution deed: occurs when firm is dissolved by mutual consent of partners. A deed
of dissolution is required and need to be registered. It should clearly mention debts and
liabilities. The dissolution deed provides the valuation of assets including goodwill and
distribution of same amongst the partners.

6. Corporatization& Compliance Department, Company Law Division
Company Registration
Office (CRO)
Karachi
Company Registration
Office (CRO)
Peshawar
Company Registration
Office (CRO)
Lahore
Company Registration
Office (CRO)
Quetta

7. Pubic Company
Any three or more persons associated for lawful purpose
may, by subscribing their names to the Memorandum of
Association and complying with the requirements of the
Ordinance form a public company.
Private Company
Any one or more persons so associated may, in like
manner, form a private company. If only one member
forms a private company, it is called a single member
company.

8. Prior approval of the Ministries/Departments etc. is required for each category of the
following companies is required to be obtained before incorporation of companies
A Banking Company
• Ministry of Finance
• State Bank of Pakistan
A non-Banking finance
Company (NBFC)
• SECP
A company providing security
service
• Ministry of Interior
A corporate brokerage house • Stock Exchange (for transfer of membership card in favour of proposed company)
A money exchange company • State Bank of Pakistan
An association not for
profitu/s 42 of the Companies
Ordinance, 1984
• License from SECP
A Trade Organization • License from Ministry of Commerce

9. Company Name Reservation
• The proposed name is neither identical or nor closely resemble with the
name of any existing company
• Should not be inappropriate and deceptive
• It doesn’t contain any prohibited word

10. Documents for registration of a private limited company
• Copy of national identity card or passport, in case of foreigner, of each
subscriber and witness to the memorandum and article of association
• Memorandum and articles of association
• Form – 1: Declaration of applicant for compliance
• Form – 21: Notice of situation of registered office of the company
• Form – 29: Particulars of first directors of the company
• Registration/filing fee
Additional Requirements for the Incorporation of a public Company
• Form 27 (List of persons consenting to act as director)
• Form 28 (Consent of Directors)

11. Additional Requirements for Incorporation of a Company having Objects of
providing Security Services
• In case of company intending to provide the services of security guard,
nine additional sets of each of the documents are required
• Ministry of Interior grants NOC for a security object company
Additional Documents for incorporation of an association not for profit
• All the documents meant for incorporation of a limited company along
with a license issued by the SECP
• In case of a trade body, a license issued by Ministry of Commerce would
also be submitted to the registrar concerned
• The license is issued for a period of five (5) years, renewable for further
term (s) of five (5) years each

12. Post
Incorporation
Requirements
(Private
Companies)
Directors of every company are required to appoint the first chief executive not later than fifteen days
from the date of incorporation and thereafter within fourteen days from the date of election.
The first auditor is required to be appointed by the directors within sixty days from the date of
incorporation and thereafter in each AGM of the company.
A single member company is also required to appoint a company secretary within fifteen days of
incorporation or of becoming a single member company or of the office of company secretary falling
vacant and notify such appointment on Form 29 within fourteen days of the date of such appointment
Any appointment, election or change in the Directors, Chief Executive, Auditors, Chief Accountant, legal
adviser etc is required to be notified to the registrar concerned on Form '29' within 14 days of the said
election, appointment or change
A company is required to notify the change in its registered office on Form-21 within 28 days from the
date of change

13. Post
Incorporation
Requirements
(Private
Companies)
First Annual General Meeting (AGM) of the company is required to be held within eighteen months from the date of incorporation
and subsequent Annual General Meetings are required to be held once at least in every calendar year, within a period of four
months following the close of its financial year and not more than fifteen months after holding of its last preceding AGM
Annual return on prescribed Form ‘A’/’B’ as applicable is required to be filed with the registrar concerned once in each year made as
on the date of Annual General Meeting, where no such meeting is held, on the last day of the calendar year
In case of increase in paid-up capital, the company is required to offer new shares to the existing shareholders and the offer is
required to be accompanied by a circular issued under section 86(3) to all the shareholders strictly in proportion to the shares held
by them and, on the allotment of shares, return of allotment on Form '3' is required to be filed with registrar concerned within 30
days from the date of allotment of shares. Partly paid shares are not allowed to be issued at all
Particulars of every mortgage or charge created by the company on its property or undertaking and every modification therein or
satisfaction thereof are required to be filed and registered with the registrar concerned within 21 days after the date of its creation,
modification or satisfaction
In case of death of single member of a Single Member Company, the secretary shall manage affairs of the company till transmission
of shares to legal heirs of the single member, and inform the registrar concerned about the death, provide particulars of the legal
hairs and in case of any impediment report the circumstances seeking within seven days of the death of directors in the form as set
out in Form S 3

14. Post
Incorporation
Requirements
(Public
Companies)
All the requirements meant for private companies given at serial Nos. (i) to (xii) above are also applicable to public
companies. However, the listed companies are also required to file list of members on CD/DVD/USB to the Commission
and the associations are required to file with the registrar concerned annual return on Form ‘B’ instead of Form ‘A’.
List of Directors and consent of Directors and Chief Executive are required to be filed within 14 days after the election of
Directors and appointment of Chief Executive on Forms 27 & 2.
A private company may commence its business immediately after its incorporation. However, a public Company shall be
entitled to commence its business after obtaining commencement of business certificate from the registrar concerned
Statutory meeting is required to be held within a period of not less than three months but not more than six months from
the date at which the company is entitled to commence business. A statutory report is required to be circulated to the
members and the registrar within the time frame as prescribed under the law
Return containing beneficial ownership of listed securities and change therein on Form 31 and Form 32 are required to be
filed with the Registrar concerned and the SECP
A listed company is also required to appoint a company secretary

15. Directors of a Limited Company: Powers and Liabilities
194. Liabilities, etc., of directors and officers. - Save as provided in this section, any provision, whether
contained in the articles of a company or in any contract with a company or otherwise, for exempting any
director, chief executive or officer of the company or any person, whether an officer of the company or not,
employed by the company as auditor, from, or indemnifying him against, any liability which by virtue of any
law would otherwise attach to him in respect of any negligence, default, breach of duty or breach of trust of
which he may be guilty in relation to the company, shall be void:
Provided that, notwithstanding anything contained in this section, a company may, in pursuance of any such
provision as aforesaid, indemnify any such director, chief executive, officer, or auditor against any liability
incurred by him in defending any proceedings, whether civil or criminal, in which Judgment is given in his
favour or in which he is acquitted, or in connection with any application under section 488 in which relief is
granted to him.
Sections pertaining to the role of Chief Executive Officer are from 198 to 204

16. Directors of a Limited Company: Powers and Liabilities
196. Powers of directors.- (l) The business of a company shall be managed by the directors, who may pay all
expenses incurred in promoting and registering the company, and may exercise all such powers of the company
as are not by this Ordinance, or by the articles, or by a special resolution, required to be exercised by the
company in general meeting.
(2) The directors of a company shall exercise the following powers on behalf of the company, and shall do so by
means of a resolution passed at their meeting, namely: —
(a) to make calls on shareholders in respect of moneys unpaid on their shares;
(b) to issue shares;
(c) to issue debentures or 1 [any instrument in the nature of redeemable capital];
(d) to borrow moneys otherwise than on debentures;
(e) to invest the funds of the company;
(f ) to make loans;
(g) to authorise a director or the firm of which he is a partner or any partner of such firm or a private
company of which he is a member or director to enter into any contract with the company for making sale,
purchase or supply of goods or rendering services with the company;

17. (h) to approve annual or half-yearly or other periodical accounts as are required to be circulated to the
members;
(i) to approve bonus to employees; 2 […] 3
[(j) to incur capital expenditure on any single item or dispose of a fixed asset in accordance with the
limits as prescribed by the Commission from time to time];
Provided that the acceptance by a banking company in the ordinary course of its business of deposit of
money from the public repayable on demand or otherwise and withdrawable by cheque, draft, order or
otherwise, or placing of moneys on deposit by a banking company with another banking companion such
conditions as the directors may prescribe, shall not be deemed to be a borrowing of money or, as the case
may be, a making of loan by a banking company with the meeting of this section; 1
Directors of a Limited Company: Powers and Liabilities

18. [(k) to undertake obligations under leasing contracts exceeding one million rupees;
(l) to declare interim dividend; and
(m) having regard to such amount as may be determined to be material (as construed in Generally
Accepted Accounting Principles) by the Board,-
(i) to write off bad debts, advances and receivables;
(ii) to write off inventories and other assets of the company; and
(iii) to determine the terms of and the circumstances in which a law suit may be compromised
and a claim or right in favour of a company may be released, extinguished or relinquished.]
(3) The directors of a public company or of a subsidiary of a public company shall not except with the
consent of the general meeting either specifically or by way of an authorisation, do any of the following
things, namely.- (a) sell, lease or otherwise dispose of the undertakings or a sizeable part thereof unless
the main business of the company comprises of such selling or leasing; and (b) remit, give any relief or
give extension of time for the repayment of any debt outstanding against any person specified in sub-
section (1) of section 195.
(4) Whosoever contravenes any provision of this section shall be punishable with a fine which may
extend to 1 [one hundred thousand] rupees and shall be individually and severally liable for losses or
damages arising out of such action.
Directors of a Limited Company: Powers and Liabilities

20. Thank you