9 Easy Steps to Register a Company in Pakistan

User Registration

The first step is to visit the SECP website and create your User ID. It is mandatory for all owners or directors of the company to register themselves.

For this, it is necessary that the mobile number is registered with CNIC. The sign-up process can be completed by verifying the PIN or OTP that will be sent to the email and mobile during registration.

Proposed Names

After this, the second step is the Name Reservation,

There are only two ways to reserve a name:

Either first reserve the name and then apply for incorporation, or submit both a name reservation and an incorporation application at the same time.

If you only reserve the name, it remains safe for 60 days, for which a fee of Rs. 1,000 is charged and If the company is not registered within this period, this name is automatically deleted from the system and becomes available to other users.

If someone else gets the same name, you cannot use the same name again.

Instructions for choosing a name

You have to suggest three names while applying.
The system has an option to “Check Availability”, where similar or identical names are displayed. You have to provide a unique name which is not similar or identical to any existing company.
If the proposed name contains a non-dictionary word or non-word, then you have to provide meaning and significance of the name also.

9 Easy Steps to Register a Company in Pakistan: Applicant Information

In this section, you have to provide details of the applicant’s personal information, such as CNIC, address, mobile, email etc.

Business Objects:

In this section, you need to select the sector, the main business type (principal line of business), and the objective clause. When you select a sector, the LEAP system automatically suggests a “principal line of business”, which you cannot manually change or add.

For example, if you select Sector: Corporate Agricultural Farming then the suggested Principal Line of Business are

Agricultural Farming

Corporate Agricultural Farming – Allied (Other)

Fish Farming

Livestock Farming

Poultry

Seed Processing

The system automatically suggests a business objective clause, but you can edit it if you want. You also have the option to add up to three additional objective clauses.

Capital Structure

In the next step, you need to enter the Authorized and Paid-up Capital of the company.

Authorized Capital is calculated by Share Price and Number of Shares:

Share Price × Number of Shares = Authorized Share Capital

Example:

If the share price is Rs. 100 and the number of shares is 10,000, the authorized share capital will be Rs. 1,000,000.

Authorized Capital indicates the maximum number of shares that the company can issue. If you need to issue more shares than this limit, you will have to make a separate application to increase the authorized share capital.

Paid-up Capital

Refers to the shares that have been paid up by the subscribers.

For example, if subscribers have paid up 5,000 shares out of 10,000, the paid-up capital will be 50% of the authorized capital.

Company Address

After this, it is necessary to enter the Address of the company — that is, Correspondence Address and Registered Office Address.

If you initially provide a Correspondence address, you will have to file a registered office address within 30 days. For this, it is necessary to inform the SSP (SECP) through Form 21, otherwise a penalty may be imposed.

Detail of Stakeholders

Directors and Chief Executive
Subscribers and directors are mandatory at the time of company registration.
Every director must be a subscriber, and one of them is appointed as the Chief Executive Officer (CEO).
A minimum of two directors are required for a Private Limited Company.
A Single Member Company (SMC) must have one director.

Article of Association(AOA) and Memorandum of Association(MOA)

SECP has provided a model AOA and MOA only the company name, address, nature of business and details of directors are changed. All other parts are same for all companies. However, in case of public limited companies, they can be modified. You do not need to upload AOA and MOA manually.
The last part of the memorandum, which contains the names of the initial subscribers and founder directors of the company, cannot be altered later. This part remains the same throughout the existence of the company.

9 Easy Steps to Register a Company in Pakistan: Article of Association(AOA)

It sets out the fundamental principles relating to the management of the company, the powers of the members, shares and directors.

The following is a detailed summary of Article of Association(AOA):

Commencement of Business

The directors of the company are directed to comply with the restrictions imposed under Section 19 relating to commencement of business.

Regulations relating to shares

If shares are issued in physical form, each member shall be issued a share certificate after allotment or transfer.
If shares are in book-entry form, the company shall register the transfer through the Central Depository (CDC).
Only one certificate shall be issued for one share, and if the certificate is lost or damaged, a new certificate can be obtained by fulfilling certain conditions.

Transfer of Shares

The transfer of shares shall be under the signature of both the transferor and the transferee.
A detailed format of a share transfer form is included in the document, which describes the manner of entering CNIC, address, signatures of witnesses and bank account details.
The directors shall not accept the transfer unless the form is correct, stamped and complete.
They may suspend the registration up to 10 days before the general meeting.
If there is any defect in the transfer, the company must be informed within 15 days with reasons.

Shares in case of death or inheritance

If a member dies, his heirs or nominees can obtain the shares by producing legal proof.
In case of joint shares, survivors will be recognized.
Every member is given the power to make a nomination during his lifetime, so that it is easy to transfer the shares to his heirs after his death.
For Muslims, inheritance will be in accordance with Islamic law, while for non-Muslim members, their personal laws will apply.

Rights of directors and heirs

If a member dies, the nominee will be considered a temporary member of the company, even if the shares are transferred to the heirs.
If the deceased was a director of the company, the nominee can serve as a temporary director to protect the interests of the legal heirs.

Change in Capital

The company can take the following steps through a Special Resolution:
Increase in authorized capital.
Divide or merge shares of greater or lesser value.
Cancel shares that have not yet been issued or accepted.
Existing members will have a pre-emptive right on the issue of new shares.

Certified True Copy

The official documents of the company, such as the Certificate of Incorporation, Memorandum of Association (MOA), Articles of Association (AOA) or other forms filed with the SECP can be obtained from the SECP for verification.
Earlier, these certified true copies of documents were provided only in hard copy form and usually took 4 to 7 days to arrive by courier.
Now, the SECP has introduced the Digital Certified True Copy Service, through which you can get certified documents in just a few minutes (usually less than 5 minutes).
If you need certified company documents, select the relevant option you will receive all certified copies via email.

Third Party Information

If you wish to register with a third party, such as EOBI or a federal or provincial department, you can provide the relevant details.

Declaration

The final step in 9 Easy Steps to Register a Company in Pakistan is the declaration section, specify who is submitting this form whether the company’s designated intermediary or a director himself. In practice, most consultants who provide such services do this using the applicant’s user ID and password.

If an agent is doing this from his personal account, he must be registered as an intermediary with the SECP, so that he can provide his registration number as an intermediary.

Review and Apply PIN

The final step is to get approval from all of the directors, each user has a unique PIN which they will used to approve the process.
The purpose of this is to ensure that no one can nominate a director of the company or register the business in the name or identity of another without their approval.
After the approval of all directors, finally the applicant who initiated this process will be able to submit the application.
This process will be submitted only after the approval or verification of all directors is completed.

Summary:

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