Subject: Corporate Law

Submitted To: Barrister Amir Zafar

Submitted By:

Roll #
 What are the different types of entities?
In General, there are three basic types of legal entities:
(1) sole proprietorship: Sole Proprietorship is when there is one owner of the business.
(2) Partnership: Partnership is when there are multiple owners of a business.
(3) corporation: The most common type of organizations today is corporations. This is
because
corporations have limited liability.
2. Does a Branch office need to be registered with the SECP?
Before proceeding with the step by step process for incorporation of foreign company.
Definition of foreign company;
“Foreign Company” means any company or body corporate incorporated outside
Pakistan, which-
has a place of business or liaison office in Pakistan whether by itself or through an
agent, physically
or through electronic mode;
Or
Reference: Section 2(35) of Companies Act, 2017
Conducts any business activity in Pakistan in any other manner as may be specified.
Information Required/Documents To Be Submitted For Registration:
Following information/documents must be submitted to Registrar:
i.Proposed company names
ii.Principal line of business or business activity of the new company setup
iii.Significance of proposed company name
iv.Relationship with company
v.Place(s) of business in Pakistan
Attested documents required for subject registration
Section 435 & 436 of Companies Act, 2017
i.Permission letter from Board of Investment (BOI)
ii.Foreign company board members resolution on foreign company letterhead in
respect of
incorporation of company in Pakistan
iii.Minutes of meeting with attendance sheet on foreign company letterhead
iv.Business license of foreign company duly attested by Embassy of Pakistan in the
country of
origin
v.List of directors/CEO/Secretaries of the company in the country of origin
vi.Charter/Statute/Deed of incorporation of foreign company duly verified/attested by
Embassy of
Pakistan in the country of origin
vii.Letter of authorization/legalization in favor of principal officer in Pakistan duly
attested by the
public office maintained and by the Embassy of Pakistan in the country of origin
viii.Passport copies of all foreign directors/board members along-with passport copy
of principal
officer designated in Pakistan for operation
ix.Bio-date (i.e. CV) of all foreign directors/board members/principal officer
X.Undertaking on stamp paper from principal officer in Pakistan (if foreign national)
Xi.Special Power of attorney if documents signed by a person other than an
authorized person3.What information is included in the Memorandum of
Association and the Articles of
Association?
Memorandum of association:
The memorandum of association of a company/corporate is an important corporate
document in
certain jurisdictions. Memorandum of association of a company as originally framed
or as altered
from time to time in pursuance of company law. It is often simply referred to as the
memorandum.
Articles of association:
Articles of association of a company framed in accordance with the company law.
Articles of
association form a document that specifies the regulations for a company's operations
and defines
the company's purpose. The document lays out how tasks are to be accomplished
within the
organization, including the process for appointing directors and the handling of
financial records
4.What is a Shareholders’ Agreement and does it need to be submitted with the
SECP?
A shareholders agreement/stockholders agreement, is an arrangement among a
company's
shareholders that describes how the company should be operated and outlines
shareholders' rights
and obligations. Shareholders agreement is a separate agreement between the
shareholders it
doesn’t need to be registered with the SECP.
5. What type of registration does a Foreign company need to do if it wants to
manufacture
goods in Pakistan?
Step 1: Approval of Company Name
Choosing the company’s name. It is important to devise a unique company name that
would set you
apart from the rest in the industry. Make sure that your company’s name does not
include any
prohibited words.
Step 2: Submission of Documents
Once the company name gets the approval, you need to submit the incorporation
documents to the
Securities and Exchange Commission of Pakistan (SECP).
Step 3: Certificate of Incorporation
After submitting the documents, the SECP evaluates them. They check their validity.
A digital
signature is granted by the National Institutional Facilitation Technologies (NIFT) and
can be
acquired through the SECP.
Also, they issue the certificate of incorporation. Presentation of the company may be
needed.
However, this depends on where the business started.
Step 4: Deposit of Shares
After the registration, shareholders must deposit their corresponding amount of shares
to the
company’s bank account.
Step 5: Registration of Income, Sales, and Professional Taxes
Registration with the Federal Board of Revenue (FBR) and issuance of a national tax
number
(NTN). is the last step. A sales tax registration number may be registered if
applicable.Alternatives to company registration in Pakistan
i.A branch office is a suitable alternative to company registration if your company
wants to have a
presence in Pakistan without setting up a separate legal entity.
Branches carrying out a contract in Pakistan can be established. However, a branch
office cannot
take part in any commercial or trading activities of whatever nature. Therefore, your
activities
depend on the contract you signed. The contract restricts your activities.
The parent company owns 100% of the branch office in the country of origin. Since it
is not a
limited liability company, it does not require any minimum capital either.
Process time for the registration takes up seven weeks. The permit can be valid for 1
to 5 years if it
has an approval from the Board of Investment (BOI).
ii. If you want to promote your products in Pakistan, you can set up a 100% foreign-
owned liaison
office here.
Besides product promotion, you can also provide technical advice and assistance,
explore the
various possibilities of joint collaboration, and export promotion in Pakistan.
However, this type cannot engage in commercial or trading activities and it is not
subject to any
minimum capital either
A liaison office can only function according to the provisions of the contract or the
assignment.
While part of the contract states that you can only provide technical assistance and
product
promotion, you cannot engage in export promotion and other activities.
Hence, it is similar to the branch office. Therefore, there will be no shareholding since
it’s going to
be in the country of origin only.
The standard time for establishing a liaison office in Pakistan is seven (7) weeks.
Therefore, once
granted your permit will have a validity period of 1 to 5 years. Also, the Board of
Investment (BOI)
needs to approve it.