Business in Pakistan:

 Business Law in Pakistan:

This overview of business laws of Pakistan is a very brief description of common forms of businesses adopted by private and public sector investors in Pakistan. An attempt has also been made to outline general requirements and regulatory regimes for each of these forms of businesses in Pakistan. These brief notes are for general guidance only and should not be taken as a substitute for thorough and professional legal advice.

What are the common forms of business in Pakistan?

Main forms of business organisations adopted by private sector in Pakistan are as follows:

Main forms of business organisations adopted by the public sector, where the government wishes to undertake an enterprise, in Pakistan are either a limited liability company or a statutory corporation.

Out of these diverse forms of business set ups in Pakistan, a limited liability company remains the most favourable form of business organisation for medium and large-scale businesses in Pakistan.

Business Laws of Pakistan:

Relevant Laws of Pakistan:

Companies remain the most favoured form of business organisation in Pakistan especially for medium and large-scale business enterprises. Legal regime for establishment and regulation of companies in Pakistan is given in the Companies Ordinance, 1984. Whereas the function of administration of these companies is vested in the Securities and Exchange Commission of Pakistan and the Registrar of Companies appointed by the Securities and Exchange Commission of Pakistan for a province of Pakistan where such company is to be registered.

Under the provisions of the Companies Ordinance, 1984 a company is a body corporate with separate legal entity and a perpetual succession and a company may be formed by persons associating for any lawful purpose by subscribing their names to the Memorandum of Association and complying with other requirements for registration of a company under the provisions of the Ordinance.

The Companies Ordinance, 1984 provides for three different types of companies:

Further, under the Companies Ordinance, 1984 two types of limited liability companies are provided for, namely:

Any one or more persons associated for any lawful purpose by subscribing their name(s) to the Memorandum of Association and complying with other registration specific requirements of the Companies Ordinance, 1984 may incorporate a private limited company. Provided that where a company has only one subscriber to the Memorandum of Association then such a company is called a Single Member Company, however, a Single Member Company remains a private limited company for all intents and purposes of the Ordinance. Whereas any three or more persons so associated may form a public limited company. A company limited by shares, whether a private company or a public company, is the most common vehicle for carrying out a business enterprise in Pakistan. .

  Registration of a Company and Commencement of Business in Pakistan:

The first step toward incorporation of a company in Pakistan is to file an application before the Registrar of Companies for availability of name. If the proposed name of the company is available and it is not in contravention to the provisions of the Companies Ordinance, 1984 and the Rules formed there under, then the Registrar shall issue a certificate stating that the proposed name is available to be adopted.

The next step is to file the Memorandum of Association and Articles of Association, which in effect is the constitution of any company, with the Registrar of Companies in the Province where proposed company is to be incorporated, along with other necessary forms prescribed under the Companies Ordinance, 1984. When the company has been registered, the Registrar issues a Certificate of Incorporation. Once such a certificate has been issued by the Registrar a private limited company may commence its business immediately. Nonetheless, a public limited company cannot commence its business or exercise its borrowing powers yet unless the Registrar has issued a Certificate for Commencement of Business. The Registrar issues the Certificate for Commencement of Business only if the following requirements have been fulfilled:

A public limited company may either be listed or unlisted. In case of a listed company its shares may be quoted and dealt with on one of the three stock exchanges of Pakistan viz. Karachi Stock Exchange, Lahore Stock Exchange and Islamabad Stock Exchange. Whereas the shares of an unlisted public limited company may not listed on a stock exchange. A public limited company that intends to have its shares listed on a stock exchange must obtain permission from the relevant stock exchange under the listing regulations of that stock exchange.

We are currently dealing or have dealt with various business sectors in Pakistan including the following and the list is growing all the time: