A company is a business that is set up as separate legal entity from its owners. The words "Private Limited" or "Public Limited" are added at the end of the name. These are sometimes known as limited liability companies (LLC) or corporations in other countries. The key difference between LLC's abroad is that taxes are paid by the directors of the company individually rather than by the company. In the limited liability company structure available in Pakistan the company pays taxes first and then the directors pay taxes on their respective individual incomes. There are members or shareholders who own the company. These members elect a board of directors. There is one managing director (CEO) who along with the board makes operational decisions. The shareholders or owners are protected from the debts and liabilities of the corporation, and the corporation pays corporate income taxes. These taxes are paid on profits rather than the income. A company may also require a company secretary, legal advisor and auditor depending on its size (does not apply to smaller companies). There is more paper work and filing work required for this type of business structure. But the obvious advantage is limited liability of the owners as well as transparency in the operations. Companies are also generally perceived to be more authentic and trustworthy when compared to other business structures. Companies are registered with the Securities & Exchange Commission of Pakistan (SECP).

Please note generally a private limited company has 2 directors whereas public limited companies have a minimum of 3 directors. However after Single Member Companies Rules 2003, you can now setup a single member private limited company (known as SMC) with one director only. For a SMC it is mandatory to have a nominee to look after affairs of the company in case of single member's death or incapacity. A company is different from sole proprietorships and partnerships. Not sure about which business structure to choose? Read our Guide.

In order to register a private limited company all you need to do is provide us the following information/documents:

Proposed name of your company (Give three names in order of priority).

Nature and scope of business.

Full name and colour CNIC copies of directors & shareholders (members or initial subscribers).

Paid-up capital by each member (in Rupees) - actual investment money to be put into company account by each shareholder.

Authorised share capital (in Rupees) - think of it as a license for the amount above. The paid-up capital above cannot be more than this license / authorised capital amount.

Office address.

Residential addresses of all directors and shareholders (members).

Valid Cell Phone Number of Members.

Valid Email Address of Members.

Whether you want to get the company incorporated through normal method (5 - 7 working days) or Fast Track (3-5 working days).
For Tax Rates on companies read our Tax Guide.