Synopsis:
- Definition of term Private Limited Company
- Essentials of Private Limited Company
- Required Documents for Registration of Private Limited Company in Pakistan
- Steps to get registration of private limited company
- Concluding Remarks
Definition of term “Private Limited Company”:
The basic concept of a private limited company is privately owned and controlled by individuals as shareholders, who have limited liability for the company’s debts.
Private Limited Company often abbreviated as Pvt Ltd or Ltd, is a type of business entity characterized by limited liability, separate legal personality, and restrictions on the transfer of shares.
Essentials to get registration of Private Limited Company
- Name Reservation: The first step is to choose a unique name for your company and get it reserved with the Securities and Exchange Commission of Pakistan (SECP). The name should not resemble the name of any existing registered company.
- Preparation of Documents: Prepare the necessary documents for company registration. These typically include the Memorandum of Association (MOA) and Articles of Association (AOA). These documents outline the company’s objectives, internal rules, and regulations.
- Filling Forms: Fill out the required forms provided by the SECP. These forms usually include Form 1 (Declaration of Compliance), Form 21 (Notice of Situation of Registered Office of the Company), and Form 29 (Particulars of Directors, Chief Executive, and Secretary).
- Payment of Fees: Pay the prescribed registration fees to the SECP. The fee structure may vary depending on the authorized capital of the company.
- Submission of Documents: Submit all the required documents along with the registration fee to the SECP.
- Obtaining Certificate of Incorporation: After verifying the documents, the SECP will issue a Certificate of Incorporation, which signifies that your company is now officially registered.
- Tax Registration: Register your company for taxation purposes with the Federal Board of Revenue (FBR). You’ll need to obtain a National Tax Number (NTN) and Sales Tax Registration Number (STRN) if applicable.
- Registration with other authorities: Depending on the nature of your business, you may need to register with other regulatory authorities such as the Pakistan Software Export Board (PSEB) for IT companies.
- Opening Bank Account: Once you have obtained the Certificate of Incorporation and tax registration, you can open a bank account in the name of your company.
- Post-Incorporation Compliance: Ensure compliance with ongoing statutory requirements such as filing annual returns, maintaining statutory registers, and holding annual general meetings.
Required Documents for Registration of Private Limited Company in Pakistan:
To register a private limited company in Pakistan, you’ll need to prepare and submit several documents to the Securities and Exchange Commission of Pakistan (SECP). Here’s a list of the essential documents required for registration:
- Memorandum of Association (MOA): This document outlines the company’s objectives, registered office address, share capital, and details of the subscribers. It’s one of the founding and most essential document of the company.
- Articles of Association (AOA): The Articles of Association sets out the internal rules and regulations governing the management and operations of the company. It covers matters such as the appointment and powers of directors, share capital, and shareholder rights. It basically formulate the structure of the organization of the company
- Form 1 – Declaration of Compliance: This form is a declaration made by the company’s promoters confirming compliance with the requirements of the Companies Act 2017. It includes details such as the company’s name, registered office address, objectives, and authorized share capital.
- Form 21 – Notice of Situation of Registered Office of the Company: This form provides details of the company’s registered office address, including the postal address, city, and province.
- Form 29 – Particulars of Directors, Chief Executive, and Secretary: This form contains information about the directors, chief executive (if any), and secretary (if any) of the company. It includes their names, addresses, national identity card numbers, and other relevant details.
- Bank Certificate: A bank certificate confirming the deposit of the minimum paid-up capital required for the registration of the company. The amount of paid-up capital may vary depending on the requirements.
- Power of Attorney: If someone other than the subscriber is signing any of the documents on behalf of the company (e.g., an attorney), a power of attorney authorizing them to act on behalf of the company may be required.
- Any other relevant documents: Depending on the specific circumstances of the company and its activities, additional documents may be required. These could include agreements, licenses, or permissions related to the business principle activity.
From Where a Private Limited Company is Registered in Pakistan:
Security and Exchange Commission of Pakistan is the platform from where we registered a Private Limited Company in Pakistan.
Steps to get registration of private limited company:
In the below we show step by step procedure of registration of a private limited company in Pakistan
- Name Availability Check: Propose a name for your company and check its availability with the Securities and Exchange Commission of Pakistan (SECP). You can do this online through the SECP website or physically at their offices.
- Preparation of Documents: Prepare the necessary documents including Memorandum of Association (MOA), Articles of Association (AOA), Form 1 (Declaration of Compliance), and Form 21 (Notice of Situation of Registered Office of the Company) as mentioned above section for required documents of registration of company.
- Drafting Legal Documents: Engage a lawyer or a legal advisor to draft the MOA and AOA of the company. These documents outline the objectives, scope, and rules governing the company.
- Company Registration: Fill out the prescribed forms available on the SECP website. Submit the required documents along with the registration fee to the SECP. You can do this electronically or physically.
- Payment of Fees: Pay the required registration fee and stamp duty through a designated bank.
- Obtain Digital Signature Certificate (DSC): All directors and subscribers of the company must obtain a DSC from the National Institutional Facilitation Technologies (NIFT) or any other authorized service provider.
- Obtain National Tax Number (NTN) and Sales Tax Registration Number (STRN): Apply for NTN and STRN from the Federal Board of Revenue (FBR) for tax purposes.
- Register for Employees’ Social Security Institution (ESSI): If you plan to hire employees, register with the Employees’ Social Security Institution (ESSI) for social security coverage.
- Register for Professional Tax: Register with the local authorities for professional tax, if applicable.
- Receive Certificate of Incorporation: Once the SECP verifies the documents and information provided, they will issue a Certificate of Incorporation. This certificate confirms the formation of your Private Limited Company.
- Post-Incorporation Requirements: After incorporation, complete any additional requirements such as opening a corporate bank account, obtaining any necessary licenses or permits, and complying with ongoing regulatory and tax requirements.
Benefits or advantages of Private Limited Company Registration in Pakistan:
Limited Liability: Shareholders’ liability is limited to the amount they have invested in the company. Personal assets of shareholders are generally protected from the company’s debts and liabilities.
Separate Legal Entity: A Private Limited Company is considered a separate legal entity distinct from its shareholders. It can own property, enter into contracts, and sue or be sued in its own name.
Credibility and Trust: Being registered as a Private Limited Company can enhance the credibility and trustworthiness of your business in the eyes of customers, suppliers, and financial institutions. It may be perceived as more stable and reliable compared to other business structures.
Ease of Transfer-ability: Shares of a Private Limited Company can be easily transferred between shareholders, subject to any restrictions outlined in the Articles of Association. This facilitates changes in ownership and can help in raising capital.
Continuity of Existence: The life of a Private Limited Company is not dependent on the status of its shareholders or directors. It can continue to exist even if there are changes in ownership or management.
Tax Benefits: Private Limited Companies in Pakistan are subject to corporate tax rates, which may be lower than personal income tax rates. Additionally, certain tax deductions and exemptions may be available to registered companies.
Access to Funding: Private Limited Companies have various options for raising capital, including issuing shares, obtaining loans from financial institutions, or attracting investment from venture capitalists and angel investors. The limited liability structure can make it more attractive to investors.
Professional Image: Operating as a Private Limited Company can project a more professional image, which can be advantageous when dealing with clients, partners, and stakeholders. It demonstrates a commitment to compliance and governance standards.
Legal Protection: Shareholders, directors, and officers of a Private Limited Company enjoy certain legal protections under the company’s structure. This can help shield them from personal liability arising from the company’s activities or decisions.
Scope for Expansion: The structure of a Private Limited Company allows for easier expansion and growth. It can attract top talent through employee stock options and incentive key personnel with ownership stakes in the company.
So to Concluding the whole discussion we can say that to start business in medium and large scale throughout the country we best choice is to get registration of private limited company in Securities and Exchange Commission of Pakistan and run your business with your vision.