Complete Guide to Company Registration Types in Pakistan

Starting a business in Pakistan? Choosing the right legal structure is a crucial first step. The Securities and Exchange Commission of Pakistan (SECP) offers multiple business registration options tailored to different needs from solo entrepreneurs to multinational corporations.

Here is a comprehensive guide to the types of company registration in Pakistan:

1. Single Member Company (SMC)

A Single Member Company (SMC) is a type of private company with only one member or shareholder. It was introduced under the Companies Act 2017 to help sole proprietors create a separate legal identity for their business.

• Ideal For: Freelancers, consultants, and small business owners.

• Legal Status: Independent from the owner.

• Liability: Limited to the capital invested.

• Management: One director only (can also be the shareholder).

2. Private Limited Company (LLC)

A Private Limited Company (often referred to as LLC in global terms) requires a minimum of two members and is one of the most popular forms of registration in Pakistan.

• Legal Entity: Separate from its owners.

• Liability: Limited to shareholders' investment.

• Capital Requirement: Minimum PKR 100,000.

• Shareholding: Cannot offer shares to the general public.

• Compliance: Subject to SECP reporting and audit requirements.

3. Limited Liability Partnership (LLP)

LLPs were introduced in May 2018 under SECP regulations to offer flexibility with a mix of partnership structure and limited liability benefits.

• Ideal For: Professionals like accountants, architects, and consultants.

• Minimum Members: Two.

• Agreement-Based Management: Partners can customize internal management structure.

• Legal Status: Separate from partners.

• Taxation: More favorable compared to corporations in some cases.

4. Public Limited Company

Public Companies can offer shares to the general public and are typically larger in scale. These are listed on the Pakistan Stock Exchange (PSX).

• Share Trading: Public shares traded on stock markets.

• Disclosure: High level of transparency and financial reporting.

• Liability: Shareholders’ liability limited to their investment.

• Regulation: Stringent audit and disclosure standards.

5. Branch / Liaison Office of a Foreign Company

A Branch or Liaison Office is a non-commercial representation of a foreign company in Pakistan, registered with the Board of Investment (BOI).

• Purpose: Facilitate communication, provide customer support, conduct market research.

• Restrictions: Not allowed to generate income or engage in trading/commercial activities.

• Ideal For: Multinational companies exploring market entry or local presence.

Each business structure in Pakistan serves a specific need, from simplified ownership to complex public offerings. Whether you're an individual entrepreneur or a multinational expanding into Pakistan, understanding these registration types will help you make the right decision.

If you're unsure which type suits your business goals, consult with a legal advisor or business consultant to explore your best options.

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