The business sector in Pakistan generates huge revenue for the country. The well-being of our state is highly dependent on the business sector as it contributes directly to the economy of our country. As important as it is, some of the investors and stakeholders who plan to initiate a private company lack the knowledge of how to register a company.
In this article, we are going to put it in perspective and study types of business and how to register them in Pakistan.
It is a fact that the economic development of any country directly relates to the business sector. Agriculture, property business, government contracts, and many others lie in the line of business.
Private entities in particular promote the future of Pakistan. Let us see how they are interlinked with our economic and social development.
When a business comes into being, it creates a number of employment opportunities for others. A business that plans to run on a large scale needs workers to carry out business operations.
Industries and MNCs usually have 2000-3000 employees working for them. That should be enough to tell you how vital business is for our ecosystem.
More Income Taxes
Private companies, if not in loss, make sufficient and sometimes excellent revenues every year. The more revenue they make the more income tax they generate for the country. We hope we do not need to tell you how income tax is beneficial for the state.
It is important to note that the taxation system of a country is a variant that appeals to foreign investors. If the taxation system is enforcing taxes on business owners more than it should then it will scare away investors easily.
Valuable Commodities and Services
A country needs goods to thrive. Not just the basic ones that you need for shelter and food but the ones that people have eyes on. Private companies are always directed to generate a product or a service that is most desired by the end-user. Keeping this in view, private company owners offer goods and services that are up to the expectations of the users. This makes people satisfied with the condition of their country.
There are different types of companies and to register them you must understand each type.
Here are the three types of companies that you will come across:
Private Limited Company
A Private Limited Company, as the title suggests, is a company that is not owned by the government or works under it. A private company does not share its stock, profit and loss statement, and shares to the public.
Public Listed Company
A public listed company does not keep its stock private. The shares are for the public to buy and anyone who has the means to buy shares can be a shareholder in it.
One Person Company
A one-person company has a sole owner who is the only proprietor of the company. The owner does not share company stock with anyone and runs the organization with the help of employees.
We now understand the types of companies and their contribution to the socioeconomic growth of our country. Now let us go through some of the steps that you will need to go through in order to register your company.
First thing first, you will need a name that complies with the rules and regulations of the Companies Act 2017.
You will then need to file your company to the Memorandum of Association. Your company’s name should be following all the rules of legislation or you will not be able to register it.
All the legal documents that include your business information such as company name, business partners, nature of business, and capital should be then submitted to the Securities and Exchange Commission of Pakistan also known as SECP.
You can also submit your application online on the SECP portal. https://www.secp.gov.pk/company-formation/registration-of-company
SECP will go through the legal documents and validate them if they are in ordinance with its business policies. You will then receive a digital signature from National Institutional Facilitation Technologies.
Certification of Incorporation is the authoritative document that allows you to initiate your business. You will be allowed to carry out your business operations under this certificate. You can get this certificate from NIFT (National Institution Facilitation Technology)
The final step before you can carry out your company’s business operations is to file for taxes that your company will be liable to pay based on the incomes, revenues, and sales.
You will register for taxes in FBR (Federal Board of Revenue) to get your company’s National Tax Number or NTN.
Registration of a company should not be a complicated procedure for anyone as it only blocks foreign investors and potential business opportunities. We hope we made it easy for you to comprehend the procedure through this article.