A private limited company gives you limited liability and a structure investors and banks understand. The process has several parts, run by different bodies. This guide lists the main steps in a sensible order.
1. Choose and reserve a name
Pick a name that follows SECP naming rules and is not too similar to an existing company. Reserve it with SECP before you prepare the other documents.
2. Plan the structure
Decide who the shareholders and directors will be, and how shares are divided. A private limited company generally needs at least two directors, and a single member company has its own rules. This is also the time to decide on authorised capital and your registered office address.
3. Prepare the incorporation documents
You will need the memorandum and articles of association, details and identity documents for the subscribers and directors, and the registered office address.
4. File with SECP
File the incorporation application through SECP's online system. Once it is approved you receive a certificate of incorporation.
5. Register for tax
- NTN: your company needs a National Tax Number with FBR.
- Sales tax: register if you supply goods or services that fall under federal sales tax.
- Provincial tax: service businesses may also need PRA, SRB, KPRA or BRA registration, depending on the province.
6. Open a bank account and set up your books
Banks will ask for the incorporation documents and tax registrations. Set up accounting from day one so filings are easy later.
Common mistakes
- Choosing authorised capital without thinking about future fundraising.
- Registering for federal sales tax but forgetting provincial registration, or the other way round.
- Starting trading before registrations are complete.
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