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PROCEDURE FOR SETTING UP OF A LIMITED

LIABILITY COMPANY IN PAKISTAN

Small and Medium Enterprises Development Authority


Ministry of Industries & Production
Government of Pakistan
www.smeda.org.pk
HEAD OFFICE
4th Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road,
Lahore
Tel: (92 42) 111 111 456, Fax: (92 42) 36304926-7
[email protected]

REGIONAL OFFICE REGIONAL OFFICE REGIONAL OFFICE REGIONAL OFFICE


PUNJAB SINDH KPK BALOCHISTAN

rd TH
3 Floor, Building No. 3, 5 Floor, Bahria Ground Floor Bungalow No. 15-A
Aiwan-e-Iqbal Complex, Complex II, M.T. Khan Road, State Life Building Chaman Housing Scheme
Egerton Road Lahore, Karachi. The Mall, Peshawar. Airport Road, Quetta.
Tel: (042) 111-111-456 Tel: (021) 111-111-456 Tel: (091) 9213046-47 Tel: (081) 831623, 831702
Fax: (042) 36304926-7 Fax: (021) 5610572 Fax: (091) 286908 Fax: (081) 831922
[email protected] [email protected] [email protected] [email protected]

July, 2018
Procedure for setting up of a limited liability company in Pakistan Legal Services

1. INTRODUCTION OF SMEDA

The Small and Medium Enterprise Development Authority (SMEDA) was established
with the objective to provide fresh impetus to the economy through the launch of an
aggressive SME development strategy. Since its inception in October 1998, SMEDA had
adopted a sectoral SME development approach. A few priority sectors were selected on
the criterion of SME presence. In depth research was conducted and comprehensive
development plans were formulated after identification of impediments and retardants.
The all-encompassing sectoral development strategy involved overhauling of the
regulatory environment by taking into consideration other important aspects including
finance, marketing, technology and human resource development.

After successfully qualifying in the first phase of sector development SMEDA


reorganized its operations in January 2001 with the task of SME development at a
broader scale and enhanced outreach in terms of SMEDA’s areas of operation. Currently,
SMEDA along with sectoral focus offers a range of services to SMEs including over the
counter support systems, exclusive business development facilities, training and
development and information dissemination through a wide range of publications.
SMEDA’s activities can now be classified into the three following broad areas:

1. Creating a Conducive Environment; includes collaboration with policy makers to


devise facilitating mechanisms for SMEs by removing regulatory impediments
across numerous policy areas
2. Cluster/Sector Development; comprises formulation and implementation of
projects for SME clusters/sectors in collaboration with industry/trade associations
and chambers
3. Enhancing Access to Business Development Services; development and provision
of services to meet the business management, strategic and operational
requirements of SMEs.

SMEDA has so far successfully formulated strategies for sectors, including fruits and
vegetables, marble and granite, gems and jewelry, marine fisheries, leather and footwear,
textiles, surgical instruments, transport and dairy. Whereas the task of SME development
at a broader scale still requires more coverage and enhanced reach in terms of SMEDA’s
areas of operation.
Procedure for setting up of a limited liability company in Pakistan Legal Services

Along with the sectoral focus a broad spectrum of services are now being offered to the
SMEs by SMEDA, which are driven by factors like enhanced interaction amongst the
stakeholders, need based sectoral research, over the counter support systems, exclusive
business development facilities, training and development for SMEs and information
dissemination through wide range of publications.

2. ROLE OF SMEDA LEGAL SERVICES CELL

The Legal Services Cell (LSC) is a part of Business Development Division of SMEDA
and plays a key role in providing an overall facilitation and support to SMEs. The LSC
provides guidance based on field realities pertaining to SMEs in Pakistan and other parts
of the world. LSC believes that information dissemination among the SMEs on the
existing regulatory environment is of paramount importance and it can play a pivotal role
in their sustainable development.

In order to facilitate SMEs at the Micro Level LSC has developed user-friendly systems,
which provide them detail description of the Laws, and Regulations including the process
and steps required for compliance.

The purpose of this document is to provide potential or existing entrepreneurs and


Service Providers, with information pertaining to requisite requirements for incorporation
of a limited liability company. Entrepreneurs interested in enhancing their understanding
about the nature and form of a limited liability company can also use the document.

3. DISCLAIMER

Form of this document and the contents therein are provided only for general information
purpose and on an "as is" basis without any warranties of any kind. Use of this document
is at the user's sole risk. SMEDA assumes no responsibility for the accuracy or
completeness of this document, its form and any of the information provided therein and
shall not be liable for any damages arising from its use.

Document No. PUN/OTC/4


Prepared By SMEDA-Punjab
Prepared In July 2018
For information [email protected]
Procedure for setting up of a limited liability company in Pakistan

PROCEDURE FOR SETTING UP OF A LIMITED


LIABILITY COMPANY IN PAKISTANi

1. Relevant Authority for Incorporation of a Company


Securities & Exchange Commission of Pakistan (SECP) is the relevant
Authority which regulates the incorporation and management of Companies
in Pakistan.

2. Requirement of Minimum Number of Members


I. 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 Companies Act, 2017 form a
public limited company; and
II. any one or more persons so associated may, in like manner, form a
private company. If only one member forms a private limited
company, it is called a single member company.

3. Step wise procedure for Company Incorporation


Following Procedure is to be followed for incorporation of a new company
under the Companies Act, 2017:-

a. Availability of Name

The first step with regard to incorporation of a company is to seek the


availability of the proposed name for the company from the concerned
registrar of companies designated by SECP. For this purpose, an application
is to be made and Rs.200/- for online application and Rs.500/- for offline
application is required to be paid seeking availability certificate for each
name. To facilitate the promoters, a list of prohibited/sensitive names has
also been provided at the link: https://www.secp.gov.pk/prohibitedwords/.

b. Submission of Documents for incorporation of a Private Limited


Company

After getting the name availability certificate, following documents are


required to be filed with the registrar concerned for incorporation of a private
limited company:-

I. Copy of national identity card/NICOP or passport, in case of


foreigner, of each subscriber and witness to the memorandum and
articles of association,
II. Copy of CNIC/NCOP of Nominee only in case of Single member
company or copy of passport in case of foreigner.
Procedure for setting up of a limited liability company in Pakistan

III. Memorandum of association drawn in conformity with Table B, C,


D, E or F of the First Schedule to the Companies Act or any other
rules or regulations notified by the Commission:
Four printed copies of Memorandum of Association in case of
offline submission and one copy for online submission, duly signed
by each subscriber in the presence of one witness and stamped as
required by the Stamp Act, 1899, where applicable. In order to
facilitate general public, the standardized specimen of
Memorandum of Association of various sectors has been provided
on the Commission’s website.
Witnesses to Memorandum of Association are not required in case
of electronic submission.
IV. Article of Associations, where required drawn in conformity to
Table A of the First Schedule to the Act.
V. Authorization for filing for filling of documents by the subscribers
on the prescribed form in favor of either one of them or registered
intermediary
VI. Form – 1: Declaration of applicant for compliance
VII. Form – 21: Notice of situation of registered office of the company
VIII. Form – 29: Particulars of first directors of the company
IX. Registration/filing fee: Original paid challan evidencing the
payment of fee as prescribed in Table - II, in any of the authorized
branches of MCB Bank Limited.

c. Additional Requirements for the Incorporation of a Public Limited


Company

In addition to the requirements for incorporation of a private limited


company as stated above, the public companies are required to file the
following documents at the time of incorporation:

i. Form 27 (List of persons consenting to act as director)


ii. Form 28 (Consent of Directors)

d. Additional Requirements where all or any of the promoters are


foreigners
In case any foreigner is a promotor of the company proposed to be
incorporated, the SECP requires following additional documents:
I. 08 set of copies passport of foreigner promoter
II. 08 Copies of colored photographs of foreigner promotor
III. 08 Copies of bio-data of every promotor
IV. 08 Copies of Memorandum and Articles of Association
All the above documents mentioned in clause (d) are sent to the
ministry of foreign affairs for security clearance of the foreigners.
Procedure for setting up of a limited liability company in Pakistan

In case the subscriber is a foreign company, the additional information is


required by the registrar including but not limited to, the profile of the
company, detail of its directors, their nationality and country of origin,
copy of its charter, statute or memorandum and Articles etc.

e. 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 at I and II above along with the bio-
data, four attested photographs of each subscriber and financial
position/bank statement of the subscribers are also required to be provided.
Ministry of Interior grants NOC for a security object company.

e. 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.
Detailed guidance is provided on the link:

https://www.secp.gov.pk/licensing/section-42-companies/

Note: Prior Approval Requirements


Prior approval of the Ministries/Departments etc. noted against each
category of the following companies is required to be obtained before
incorporation of companies: -

Sr. A banking Company I) Ministry of Finance


No II) State Bank of Pakistan

1 A non-Banking finance Company SECP


(NBFC)
2 A company providing security Ministry of Interior
service

3 A corporate brokerage house Stock Exchange (for transfer of


membership card in favour of
proposed company)
Procedure for setting up of a limited liability company in Pakistan

4 A money exchange company State Bank of Pakistan

5 An association not for profit u/s 42 License from SECP.


of the Companies Ordinance, 1984
6 A trade organization License from Ministry of Commerce

STEP WISE PROCEDURE FOR ONLINE DOCUMENTATION FOR THE


INCORPROATION OF THE COMPANY

Log on to eServices:

The client will connect to https://eservices.secp.gov.pk/eServices to log on


to his/her account or signup, in case of a new user.

For incorporation process, please note that you will need to create separate
User IDs for all proposed Subscribers, in order to obtain their system
generated PIN. After obtaining name availability, User should use the
“Manage Company Users” button available on the top right hand side of the
web page to create separate/additional User IDs.

Enter Information:

A successful logon to eServices by entering user ID and password will display


a list of available and unavailable processes. If the Company name has been
reserved successfully, the Company Incorporation facility will be available at
this stage.

User will click on the company incorporation process. An input page is


displayed, wherein the following information will be entered by the user.

(i) Application Details:


Check the details of the proposed company in terms of its complete
name and kind to ensure that the information is correctly
displayed. In case of any issue, please contact the concerned
Company Registration Office (CRO).

Click on “Mode of Payment” and select the mode whether you


want to make payment through “Bank Challan” or “Credit Card”.
Procedure for setting up of a limited liability company in Pakistan

In case you choose “Bank Challan”, then click on “Locate Bank”


and select the designated bank branch from the available branches
of MCB Bank Limited or United Bank Limited.

(ii) Declarant:
In this section, enter the compulsory information about the
declarant/company representative. A declarant can be any person
authorized to represent the proposed company by the
Owners/Board of Directors. Any employee or even the director of
the proposed company could be chosen for this responsibility.

(iii) Director/ Subscriber:


Enter detailed data regarding the Board of Directors and
Subscribers in this section. “Add” and “Remove” buttons will
create and remove rows for data entry.

(iv) Company information:


Enter company information e.g., registered office address, sector
classification, share capital, objects etc., in this section.

(v) Signatory:
Enter details of a signatory in this section.

(vi) Press Continue Link:


By pressing Continue Link, Process Document Listing Page will be
displayed, containing the following links alongwith Sign form
option:

a. Update Form(s) Data:


Click link if you want to update the data. After updating data,
press Continue link again. Process Document Listing Page will
be displayed again.

b. View Forms:
System automatically fills out the required forms using the data
entered by you. You can view these forms by clicking on the
given link.

c. View Company Profile Form:


To see company profile, click this link.

d. Fill New Attachment Form:


In this link, you can attach the required documents in PDF
format e.g., copy of CNIC, name availability letter, etc. Press
Save Form button after attaching the required documents.

e. Fill New Attachment Form Articles of Association:


Procedure for setting up of a limited liability company in Pakistan

Click this link and attach the Articles of Association in PDF


format. Press Save Form button after attaching the said file.

f. Fill New Attachment Form Memorandum of Association:


Click this link and attach the Memorandum of Association in
PDF format. Press Save Form button after attaching the said file.
Please note that all the above mentioned PDF file names should
be short, without spaces, and should not contain any special
characters.

g. Fill New Bank Challan:


Click link and bank challan will be displayed. Bank Challan is
automatically populated with prescribed fee and other
information by the eServices application. Press Save Form. Do
not print and pay challan before submitting the process/form.

h. Sign Forms (Using PIN).


The user shall Click “Sign form”. Please note that sign form link
will be activated when all mandatory documents are attached
and challan is saved.

Enter the PIN and click “Apply user PIN”, field for “PIN
APPLIED” will be auto-populated and on clicking “Submit
process to SECP” button, process will be submitted to SECP.
Please note that every subscriber needs to sign the documents
by logging in with his/her User ID and password and applying
their respective PIN. Click this button. All the documents will be
submitted to the SECP and a process reference number will be
displayed. Please keep this reference number for any future
correspondence, if required.

i. Make Payment:
Payment through Challan:
Click on Submitted Processes link available on the left side of
the page. Documents submitted by you along with bank challan
will be displayed. Click and open challan and then press Print.
Four copies will automatically be printed as original copy,
applicant copy, bank copy and branch copy.

The fee shall be deposited in the Bank branch selected by the


applicant from the designated branches of MCB Bank
Limited/United Bank Limited. The bank shall retain the branch
and bank copies and return remaining two copies (original and
applicant copy) to the client.

Payment through Credit Card:


Procedure for setting up of a limited liability company in Pakistan

To facilitate investors and speed up processing time of


transactions in eServices, SECP has introduced online payment
of fee through Credit Cards. This facility is only available to
depositors/applicants using eServices online submission option
of SECP and transact through eServices portal. To make
payment through Credit Card, click on “Online Payment” link
available on the left side of the page, then select the relevant
check box under “Make Payment” and follow procedure.

For obtaining further information regarding payment of fee


through Credit Cards, please visit SECP website and see Online
Payment Guide available on the eServices page. Payment
through MCB Online Fund Transfer Facility SECP has also
arranged with MCB Bank Limited to introduce an “On-line
Fund Transfer (OFT)” facility whereby its depositors can pay
SECP fee directly into SECP’s bank account in MCB through on-
line fund transfer from their MCB Bank account, without the
need to visit a branch for physically depositing the amounts.
This facility is only available to depositors/applicants using
eServices online submission option of SECP and transact
through eServices portal.

For obtaining further information regarding MCB OFT Facility,


then please visit SECP website and see Online Fund Transfer
Facility Guidelines available on the main page.

The process will be initiated as soon as the SECP receives the verification of
deposit of fee from the Bank.

User will receive response from the SECP via email, with any of the response,
acceptance (Incorporation Certificate Dispatched through Courier), rejection
or issue resolution.

For more information about eServices, please visit the website at


https://eservices.secp.gov.pk/eServices/

Post Incorporation Requirements

a. Private companies

i. 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.
Procedure for setting up of a limited liability company in Pakistan

ii. 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.

iii. 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.

iv. 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.

v. A company is required to notify the change in its registered office


on Form-21 within 28 days from the date of change.

vi. 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.

vii. 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 .

viii. 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.

ix. 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 .

x. In case of death of single member of a Single Member Company,


the secretary shall manage affairs of the company till transmission
Procedure for setting up of a limited liability company in Pakistan

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.

b. Public companies

i. 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’.

ii. 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 & 28.

iii. 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.

iv. 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.

v. 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.

vi. A listed company is also required to appoint a company secretary.

c. Requirements for establishment of place of business by foreign


companies
A Foreign Company incorporated outside Pakistan, is required to file
the following documents to the registrar concerned within 30 days
from the establishment of its place of business in Pakistan. Detailed
procedure is available at https://www.secp.gov.pk/media-
center/guide-books/general-guide-books/

VIRTUAL ONE-STOP SHOP PORTAL (VOSS)


Procedure for setting up of a limited liability company in Pakistan

The SECP has introduced the Virtual one-stop shop portal for integrated
business registration with Federal Board of Revenue (FBR) and Employees
Old Age Benefits Institution (EOBI). A web portal has been developed to
provide a single interface for investors intending to get their company
registered with the SECP, followed by NTN/tax registration with the FBR,
and employers’ registration with EOBI.

VOSS portal is available for public access at


https://voss.gov.pk/Forms/frmLogin

Fast Track Registration System


Fast Track Registration System is introduced for quick processing of
availability of name, incorporation of companies, change of name of
companies and charge registration, modification and satisfaction cases. It
ensures quickest disposal with a minimum of four working hours. FTRS
ensures provision of services in hours, enhanced public facilitation, increase
in corporatization, compliance and development of corporate sector.
Procedure for setting up of a limited liability company in Pakistan

Table - I

RATES OF STAMP DUTY

Stamp duty, previously levied on Memorandum and Articles of Association


of a company, has been abolished by all the provincial governments. It now
remains applicable in I.C.T. only, the rates of which are Rs. 60/- on
Memorandum of Association and Rs. 200/- on Articles of Association.
However, no stamp duty is required to be levied in case of applications
submitted through eServices.
Procedure for setting up of a limited liability company in Pakistan

Table - II

SCHEDULE OF FEES

The Registration Fee payable by a company having share capital at different


levels of capital are as follows:

In case of In case of
Item online physical
submission submission
of of
documents documents
Rs. Rs.
1
[I. By a company having a share capital:-
(1) For registration of a company whose nominal share capital
does not exceed 100,000 rupees, a fee of ….. 1,000 2,000

(2) For registration of a company whose nominal share capital


exceeds 100,000 rupees, the additional fee to be determined
according to the amount of nominal share capital as follows,
namely:

(i) For every 100,000 rupees of nominal share capital or 500 1,000
part of 100,000 rupees, up to 10,000,000 rupees, a fees
of ….

(ii) For every 100,000 rupees of nominal share capital or 400 750
part of 100,000 rupees, after the first 10,000,000
rupees, upto 5,000,000,000 a fee of …

(iii) For every 100,000 rupees of nominal share capital or 150 250
part of 100,000 rupees after the first 5,000,000,000
rupees, upto any amount of fee of …

Provided that a company which is wholly owned by
the Federal Government and has been notified by the
Federal Government in the official Gazette for exemption
from paying fee shall be charged a fee of Rs. 10,000/-:

Provided further that the fee payable at the time of
registration of company shall not exceed forty million
rupees in case of online submission and fifty million
rupees in case of physical submission.

Details of other fees payable under the Company Law are available on the
following link:
Procedure for setting up of a limited liability company in Pakistan

https://www.secp.gov.pk/company-formation/fee-calculator/schedule-of-
feesixth-schedule/

Fee Calculator

In order to facilitate the corporate sector and the general public, SECP has
provided a facility of Fee calculator on https://www.secp.gov.pk/company-
formation/fee-calculator/company-incorporation-fee-calculator/ for instant
calculation of the registration fee as well as fee for enhancement of authorized
capital.
Procedure for setting up of a limited liability company in Pakistan

LOCATION AND CONTACT DETAILS OF COMPANY REGISTRATION


OFFICES

Company Registration Office, Islamabad


State Life Building, 7-Blue Area,
Islamabad.
Phone No: 051-9208740 Fax No: 051-9206893
Company Registration Office, Karachi
4th Floor, SLIC Building No.2,
Wallace Road, Karachi.
Phone No: 021-99213272 Fax No. 021-99213278
Company Registration Office, Lahore
3rd & 4th Floor, Associated House,
7-Egerton Road, Lahore
Phone No. 042-99200273-4 Fax No: 042-99202044
Company Registration Office, Multan
63-A, 2nd Floor, Nawa-e-Waqt Building,
Abdali Road, Multan.
Phone No: 061-9200530/9200920 Fax No: 061-9200530
Company Registration Office, Faisalabad
2nd Floor, Faisalabad Chamber & Commerce Building,
East Canal Road, Faisalabad.
Phone No: 041-9230264 Fax No: 041-9230263
Company Registration Office, Peshawar
1st Floor, State Life Building, The Mall,
Peshawar Cantt.
Phone No: 091-9213275, Fax No: 091-9213686
Company Registration Office, Quetta
Aiwan-e-Mashriq, Plot # 4-A, Ground Floor,
Opposite FC Headquarter, Hali Road,
Model Town Quetta.
Phone No: 081-2844136 Fax No: 081-2827538
Company Registration Office, Sukkur
B-73 , Hamdard Housing Society,
Airport Road, Sukkur,
Phone No: 071-5630517 Fax No: 071-5630517
Company Registration Office, Gilgit
H. N. 02, Ayub Colony,
Near Apna Bank
Phone No: 5811-922572


i
The content of this guide has been taken from the SECP’s promotors guide with
little modifications wherever required.

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