Types of companies and registration process in Pakistan

Types of companies in Pakistan are a hot topic in 2023 because experts predict that Pakistan needs a documented economy. Moreover, the documented economy is in favor of Pakistan. Every registered business lies in a documented economy, whether registered as a sole proprietorship or company. We will discuss the types of companies you can register in Pakistan and the overall procedure for company registration in Pakistan.

Types of companies in Pakistan

The blog will discuss three major types of company registration in Pakistan. The types of companies are listed below.

• Private limited company
• Single Member Company
• Public listed company

Private limited company

A minimum of two persons can register a private limited company in Pakistan. Foreign investors can also proceed with company registration in Pakistan, and you can call this company a foreign-owned private limited company. You can have a foreign shareholder in a private limited company. Still, Israeli investors cannot register a private company in Pakistan and cannot be shareholders in any Privately registered company in Pakistan. There are some significant points that you should consider before company registration in Pakistan.

• No minimum fixed capital is required for private company registration in Pakistan, but Rs. 100,000 is considered a minimum capital for private company registration in Pakistan.
• However, the minimum capital amount depends on the feasibility report that gives you a picture of the expenses of setting up a private company.
• Company registration in Pakistan also needs a company’s registered address located in Pakistan.
•  In general Private company registration in Pakistan takes six weeks. However, sometimes, you need approval from the investment board and a clearance certificate from the interior ministry.
• A minimum of two shareholders can register a private limited company

Single Member Company

A single member can register a company in Pakistan, calling it a single-member company. Single Member Company has only one shareholder. A foreign investor can also register a single-member company in Pakistan, but a foreign investor from Israel cannot register a single-member company in Pakistan. Before registering a single-member company in Pakistan, you should consider some points that we will discuss below.

• There is no minimum capital requirement for single-member company registration in Pakistan, but Rs 100,000 is the minimum capital amount for single-member company registration in Pakistan.
• Single-member company registration in Pakistan also needs a registered office address that should be located in Pakistan
• Generally, single-member company registration takes four weeks. However, online company registration only takes a couple of hours.
• The liability of a single-member company will remain limited to the company’s value, and there will be no legal action against the company’s owner or the owner’s account.

Public limited company

Public limited companies are divided into two categories: listed and unlisted. Listed companies are listed on the Pakistan stock exchange, and the general public can buy or sell their shares. On the other hand, unlisted public companies whose shares are offered to the public but not traded in the stock exchange market. Both types have shared limited liability. Before registering a public limited company in Pakistan, you should consider some points that we will discuss below.

• Foreign investors are allowed for publicly listed or unlisted limited company registration in Pakistan.
• The minimum capital required for listed public limited company registration in Pakistan is Rs. 200 million.
• The minimum capital required for unlisted public limited company registration in Pakistan is Rs. 100,000.
• There is a subscription limitation for a listed public limited company that there should be a minimum of 500 applicants for a share’s subscription.
• The minimum number of shareholders for a listed public limited company is seven (7), while the minimum no of shareholders for an unlisted public limited company is three (3).
• The minimum time required for both public limited companies is six (6) weeks.

For read more about business structure and sole proprietorship registration, click on the below link.

https://businessdream.pk/how-to-register-a-sole-proprietorship-in-pakistan-in-2023/

Types of companies List

We will share a chart having all the necessary information about the company registration in Pakistan.

Company registration For foreigners

Pakistan is a developing country and welcomes foreign investors for company registration in Pakistan. However, Pakistan does not accept Israel as a state, so the residents of Israel cannot register a company in Pakistan and cannot buy a share of any registered company in Pakistan.

 Moreover, Foreigners can register a single-member company, and two or more foreigners can register a private or public limited company in Pakistan.

Minimum capital required

Share capitals have two types in Pakistan, authorized capital and paid-up capital. You will declare both capitals in the article of the association at the time of company registration in Pakistan. 

When a company collects an amount from its shareholders, we say it is paid-up capital. The maximum amount a company can collect from its shareholders is authorized capital.

The minimum amount required for company registration in Pakistan is not fixed, but Rs. 100,000 is considered a minimum capital for company registration in Pakistan.

For good practice and success of a company, you should have paid capital per your planned expenses or according to the feasibility report of your company.

How to register a company in Pakistan

We have provided all the necessary information required for company registration in Pakistan. Now, we will discuss the overall steps involved in company registration in Pakistan. The company registration in Pakistan is illustrated in the picture shown above.

For step by step guide of online company registration, Click on the below link.

https://businessdream.pk/best-guide-on-single-member-company-registration-in-secp-in-pakistan-in-2023/

Company name approval

Selecting a company name is the first step for company registration in Pakistan. We are giving some tips below for your convenience in choosing a name for your company.

• The company name should be unique
• Easy to remember
• Easy to pronounce
• The name should match the product of the company
• The company name should not match anyone else company name
• The company name can not be a familiar name like Rehman
• The company name should match in pronunciation with any other company name

After selecting the company name, you will fill out a form to reserve your chosen name. Moreover, you can apply for name reservations and company registration combined.

Documents submission

After the approval of the name reservation or combined company registration process, you will submit the required documents to the SECP office listed in the form. We will discuss them in another blog.

Certificate of Incorporation

After submitting the required documents, SECP will evaluate the documents and fulfill the necessary official verification. SECP will issue the certificate of incorporation.

Deposit of Shares

As the company registration is complete, you must open a bank account in the company’s name, and shareholders will submit the amount as per their share values. 

Registration of Income and sale tax

 you should register your company’s income tax and maybe sale tax if required from the federal board of revenue (FBR). It is essential to discuss whether the company’s income tax number will differ from its shareholders.

For SECP website, click on below link.

www.secp.gov.pk/