The Companies Act, 2017 outlines the procedures for forming a company in Pakistan. The process involves several key steps, including drafting a memorandum of association, complying with registration requirements, and choosing the appropriate company type.
Types of Companies
- Public Company: Requires at least three persons to form and can issue shares to the public.
- Private Company: Requires at least two persons to form and cannot issue shares to the public.
- Single-Member Company: Can be formed by one person and is subject to specific requirements.
Steps to Form a Company
- Memorandum of Association: Prepare a memorandum of association, a legal document outlining the company’s name, registered office, objectives, liability of members, and share capital (if applicable).
- Registration: Submit the memorandum of association and other required documents to the Registrar of Companies. These documents may include articles of association, a declaration by subscribers, and proof of identity and address.
- Payment of Fees: Pay the prescribed registration fees to the Registrar.
- Certificate of Incorporation: Once the Registrar verifies the documents and fees, a certificate of incorporation will be issued. This certificate marks the official formation of the company.
Specific Requirements for Single-Member Companies
- Nominee: The sole member must nominate a person who will be responsible for transferring shares to legal heirs in case of the member’s death and managing the company’s affairs until the transfer is complete.
- Conversion: If the shares are transferred to multiple legal heirs, the company will cease to be a single-member company and must comply with the provisions for converting to a private company.
Types of Liability
- Limited by Shares: Members’ liability is limited to the unpaid amount of their shares.
- Limited by Guarantee: Members’ liability is limited to the amount they guarantee to contribute to the company in case of winding up.
- Unlimited: Members have unlimited liability.
Conclusion
Forming a company in Pakistan involves several steps and considerations. By understanding the different types of companies, the required documents, and the registration process, individuals and businesses can establish their legal entities effectively. It is advisable to consult with legal professionals for specific guidance and assistance throughout the process.
