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Corporate Law and Commercialization 

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Corporate law deals with the rights, relations, and obligations of persons, organizations, businesses, and companies. Moreover, commercialization refers to the procedure of running or managing something for financial gain. It involves the introduction of new products, and services in the market, including its marketing, distribution, customer services, and other important practices which are necessary for its success in the market.

 

 

Who can form a public or private company?

Any three persons can form a public or private company for a lawful purpose.

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How is a private or public company formed?

A private or public company can be formed when the persons intending to form a company subscribe their names and particulars to the Memorandum of Association and comply with all the other provisions of law.

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What is a single member company?

A single member company is one where only one person forms a private company.

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What is the difference between a single member company and private company?

The difference is that if one person forms a private company, then it is a single member company but, it more then one person forms a private company for purposes that do not specifically benefit the public at large then it is known as a private company.

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Where should I get my company approved before incorporation?

The following is a list of the type of companies along with the relevant authorities who shall approve the companies before their incorporation.

  • Money Exchange – State Bank of Pakistan

  • Banking – State Bank of Pakistan, Ministry of Finance

  • Corporate Brokerage House – Stock Exchange (A membership card is granted.)

  • Finance Company (Non-Banking) – SECP (Securities and Exchange Commission of Pakistan)

  • A non-profit association under section 42 of the Companies Ordinance, 1984 – SECP (Securities and Exchange Commission of Pakistan)

  • Trading Company under section 42 of the Companies Ordinance, 1984 – Ministry of Finance, SECP (Securities and Exchange Commission of Pakistan)

  • Security Service Providers – Interior Division

 

 

What is the pre-incorporation or registration requirements of a new company?

The following requirements must be fulfilled before the incorporation of a company for its registration:

  • Available name

  • Memorandum of Association along with its certified copies

  • Particulars of the persons forming the company

  • Articles of Association along with its certified copies

  • All the other documents required for a specific company (explained in answers below)

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Can I name my company anything I want?

Pretty much, but no. The name has to be respectful and in no way vulgar or too controversial. Moreover, you have to seek the availability of the name from the registrar by submitting an application with a fee of two hundred rupees, prior to incorporation.

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What documents are required for the registration of a Private Limited Company?

You must submit the following documents to the registrar for the registration of a Private Limited Company:

  • 1 copy of National Identity Card of each subscriber and witness of the Memorandum and Articles of Association. In case, the subscriber or witness is a foreigner then a copy of their Passport is to be submitted.

  • 4 copies of the Memorandum and Articles of Association which must be signed by all the subscribers in the presence of at least 1 witness. Moreover, a copy of these must be stamped according to the provisions of the Stamp Act, 1899.

  • Form 1 which is for the “Declaration of Compliance with the Pre-requisites for Formation of the Company”.

  • Form 21 which is for the “Notice of situation of registered office of the Company”.

  • Form 29 which is for the “Particulars of the first directors of the Company”.

  • 1 copy of challan paid in the designated bank or a Pay Order/ Bank Draft drawn for SECP

  • At least 1 sponsorship stating a person shall correct the deficiencies, if any, in the Memorandum and Articles of Association, and for collecting the Certificate of Incorporation.

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However, in case of a company dealing in security services should submit nine sets in addition to the abovementioned documents along with 4 attested passport size pictures of every subscriber and their bank statements.

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One the other hand, a non-profit company, in addition, has to provide a license which is granted by the SECP (Securities and Exchange Commission of Pakistan).

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Can I transfer the membership of my Single Member Company to someone else?

Yes.

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What documents are required for the incorporation of a Single Member Company?

All the documents required for the incorporation of a Private Company shall be required in this case. Moreover, apart from those documents, Form S1 along with a nominee director and an alternate nominee director is required in case the single member incorporating the company dies.

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How can a Private Company be converted into a Single Member Company?

The company has to pass a special resolution and make necessary changes it’s Articles of Association. The permission of the commission must also be sought by filing an application.

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What is to be done after the incorporation of a Private Company?

The following steps should be taken after the incorporation of a Private Company:

  • Determination of directors and entering their names in the Memorandum.

  • Appointment of CEO by the directors

  • Appointment of the first auditor by the directors

  • First Annual General Meeting within 18 months from incorporation

  • Issuance of share certificates to shareholders

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What is to be done after the incorporation of a Public Company?

Apart from all the abovementioned tasks listed of the Private Company, a Public Company also needs to take the following steps:

  • Filing a list of directors within 7 days of incorporation

  • Statutory Meeting within 3 – 6 months from commencement of business

  • Filing of 2 copies of audited Balance Sheet along with the Accounts of Profit and Loss to the registrar, 3 copies to SECP, and the Stock Exchange

  • Filing of Form 31 and 32 to the registrar and SECP

  • Appointment of the Company Secretary

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Caution: 

Information contained in the above FAQs is for general understanding purposes only and may have altered or have become incorrect owing to variation in factual aspects and evolving laws, therefore, should not be treated as an alternate to professional legal advice.  

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