In this article, we will learn SECP Company registration step by step to set up your dream business in Pakistan, as it is a preferred form of business.
In Pakistan, the law that governs company registration/incorporation is the Companies Act 2017 (the Act). The Act provides details about the formation of a company and running the company. Currently, the power to register a company is with the concerned Company Registration Office (CRO) in the area. CROs work under the Securities & Exchange Commission of Pakistan (SECP). SECP regulates the formation of companies, their compliance, and monitoring and grants licenses for licensed businesses. At present, the CROs are providing services in Islamabad, Karachi, Lahore, Peshawar, Quetta, Multan, Faisalabad, and Gilgit.
Status of Your Company
If you, after considering the relevant factors for deciding to register a company in Pakistan, the first decision you need to take is about its status. Either you can choose a single-member company (SMC), a private company, or a public company. If you want to do business as a solo flight, an SMC is an option, with all benefits of a limited liability company. However, if you want to keep the business within the close circle of family or friends, a private company is a good choice. Instead, if you plan to expand the business in the future, with public investment, then your choice must be a public company.
For a private company, there must be at least two persons (but not more than 50) and for a public company at least three persons will have to join hands and there is no upper limit. For inviting investment from the general public, you can apply for a listing on Pakistan Stock Exchange.
Name Reservation for Your Company
Once you have decided on the status of the company, then you will have to choose a name for the proposed company. For choosing a name for the proposed company, first, you will have to confirm whether the proposed name is available or not. There are many important points you must consider before deciding on a name.
You can check the availability of your preferred name and if your chosen name does not appear in the results, it means that the name may be available for registration of a company. Yet, the final decision about the availability of the name is of the registrar.
The next step is to file an application for reservation of name in which you can mention three names, in order of priority. Upon confirmation, you will have to file all the relevant documents for the incorporation of the company within 60 days. If you fail to register the company within the given time, the name shall not be available anymore. However, you can apply again for the same name it is available.
Application for incorporation Your Company
In order to submit the documents to the concerned CRO, two options are available. You can either file the documents online or submit them in physical form, at your choice. However, online filing is a cheaper and more convenient option.
You may choose your preferred way of filing the application and submitting the documents for examination and approval.
Submission of Documents
The documents required for company incorporation are identity documents of the promoters, a Memorandum of Association, and Articles of Association. You will have to file your application in the prescribed format (Form-II) in which you will mention all the details about the promoters, directors, shareholders, CEO, capital structure, registered office address, and a declaration.
Memorandum of Association
A Memorandum of Association is the constitutive document of the company, containing information about the name of the company, and its main business. Moreover, it contains the name of the province in which its registered office will situate, the authorized capital, and the limit of liability of the members. There are five main clauses of the Memorandum, given below.
Articles of Association
Equally important is the Articles of Association, a document that governs the internal business procedures of the company. It provides legal guidelines on how the company will run its business as an organization. It includes many things like the number of directors, procedures for their election, and their powers and duties. Further, it provides the procedure for the issuance and transfer of shares, holding meetings, books of accounts, audits, and dividend payments. Most importantly, this document must be in compliance with the Act to be valid.
Most importantly, both Memorandum of Association and Articles of Association shall be signed by all the promoters. This is a separate page containing a table, mentioning names, family names, nationality, residential addresses, and occupations. Lastly, it provides information about the number of shares subscribed by the proposed.
Lastly, to confirm the truthfulness of the information and contents of the documents, one of the promoters will sign a declaration.
Lastly, you will have to submit the prescribed fee for Incorporation. The fee for incorporation is based on the amount of Authorized Capital. A higher amount of Authorized Capital will require a higher fee. Besides, there is a fee for the submission of the forms with the application for incorporation.
Once the concerned officer at the CRO satisfies himself, he will issue you a Certificate of Incorporation. The certification will mention the name of the company, date of Incorporation, a Unique Identification Number (UIN), and fees charged. This will be conclusive proof that your company registration process is complete.
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It’s Done But…
That’s all you have to do for company registration and you are set to start your business as a company. Congratulations! If you still need assistance registering your company we will be happy to provide complete services to register your company.
BUT THIS IS NOT THE END. There are a few more steps after incorporation of the company you need to know to run your company smoothly and in compliance with the law. If you have any queries you can contact us.