Private Limited Company Registration in Pakistan
All you need to know
A Private Limited Company offers limited liability and legal protection to its shareholders. A Private Limited Company in Pakistan lies somewhere between a partnership firm and a widely owned public company. It can be registered with a minimum of two people. A person can be both a director and shareholder in a Private Limited Company.
The liability of the members of a Private Limited Company (PLC) is limited to the number of shares held by them. A Private Limited Company in Pakistan can begin with operations after getting the Certificate of Incorporation. A PLC can be incorporated within 15 working days.
How to start / form / make a Private Limited Company?
Registration of Company:
The procedure of registration, formation and regulation of companies in Pakistan is given in the Companies Act 2017. SECP is department with authority to form and manage the company incorporation. The following information has to be provided in prescribed manner to the Exchange Commission of Pakistan SECP for the registration of company.
- Name of the company
- Principal place of business of the company
- Nature of business
- Memorandum and Articles of Association (MOA)
- The name of directors, their permanent addresses and other particulars
- Amount of share capital, Authorized and Paid up
- Number of shares taken by each shareholder
Advantages of Limited Liability Companies
The basic features and advantages to carry out the business through a company registered in Pakistan are as under:-
- Distinct Legal Entity: A Company registered is separate from its shareholders/directors. It has its own legal entity. It can borrow money and invests funds, own property, sue and be sued, enter into contracts etc.
- Limited Liability: Company Incorporated gives the privilege of limited liability to its members up to a maximum of their investment in shares in that company. Debts of company are the debts of the company and not of the people running the company or owning shares in it. Personal property of the shareholders can not be attached for the recovery of debts.
- Investment of Every Person is Easley Measurable: In a limited company, the investment of every member, director, or promotor is known as it is pre-determined at the time of incorporation.
- Transferability of Ownership of Shares; A private limited company provides clear and convenient legal framework for the transferability of interest (shares). It means that the process of transfer of shares in a company registered in Pakistan is easy and transparent.
- Perpetual Succession One of the major advantages of a Company registered in Pakistan is its Perpetual Succession. In contrast to partnership, the death of one or more or even of all the members does not affect its legal status and do not end the company.
- Funds Easy to Raise: Preference by the financial sector in extending the financial assistance to documented and organized form of incorporated business.
- Accountability and Responsibility: Every Private Limited Company prepare its proper books of accounts and get them audited.
- Business Status: Incorporation gives an elevated status than partnership and Proprietor-ship in the organizational hierarchy.
- Establish Credibility: Having an incorporated business would give any business more credibility among potential customers, vendors, partners and employees.
- Legal and Organizational Framework: The company must function within the limits prescribed through its Memorandum and Article of association and regulates its existence through a set of bylaws mentioned in.
You can visit our Tax Updates page for related articles