How to register a Single Member Company with SECP 2024

Sole proprietors, sole traders, freelancers and self employed businesses comprise the major chunk of the undocumented economy of Pakistan. In order to document these businesses, the Companies Act 2017 facilitates them to corporatize their setup. It offers solo businesses to register as single member companies.

Under the Companies Act, the Securities and Exchange Commission of Pakistan (SECP) regulates the corporate sector of Pakistan. It registers following entities under the Companies Act 2017.

1. Single Member Company
2. Private company
3. Public company
4. LLP
5. Section 42
6. Foreign company

The process is the same regardless of the type of setup you want. However, the legal requirements and the technicalities vary.

However, I will only discuss the process of registration of a Single Member Company (SMC) in Pakistan in simple language. I have also written individual articles on the registration of other types. 

Let’s begin

Special legal requirements for SMC

SMC has only one shareholder and one director. Both persons must be the same. The sole trader will become the (sole) director and the only shareholder of SMC. 

Upon the death of the sole trader, the business can not be wound up because it is registered as a company. Instead it is transferred to the legal heirs of the sole director. For this purpose, a next of kin is appointed at time of company registration. Next of kin transfers shares of SMC to the legal heirs.

Next of kin must be major (above 18) and one of the following:

1. Spouse
2. Sibling (brother or sister) 
3. Parents (mother or father)
4. Children (son or daughter)

Benefits of SMC

The cover of a single member company gives sole traders benefits of a corporate business. Such as both the directors and SMC have different taxation, security of personal assets of sole proprietors from bank loans, limited liability of business, perpetual succession etc. 

Create your account on SECP eZfile (LEAP portal)

LEAP eZfile is an online portal. You need to create your account while you must have:

1. Your Computerized National Identity Card (CNIC or National ID card) or passport for foreign nationals
2. Pakistani SIM mobile number
3. Email ID

After you have entered all required information like name, your father’s name, address, email, CNIC and mobile number, desired password, SECP sends codes on email and mobile number, Just enter the codes in the respective boxes. Now your account is created.

Remember: you need to create eZfile accounts of the sole director and his next of kin in the same way. Your passport or ID card number becomes your login ID.

Prepare required documents / information

Good you have successfully created your account on LEAP eZfile. Now, SECP requires following information from you:

1. CNIC / passport of the sole director and sole shareholder including CEO
2. Full name, father’s name, residential address, mobile number and email address of the sole director
3. CNIC / passport of next of kin
4. Full name, relationship with sole director, residential address, mobile number and email address of next of kin
5. No. of the shares to be held by the sole director
6. Authorized share capital
7. Paid up share capital
8. Company name, address, registered office address, principal line of business (main business objects), email, website, telephone

Before you start, you should know about the Memorandum and Articles of your proposed business. Both these documents are constitutional documents of a company. You will find their formats at the SECP official website. Don’t worry eZfile will generate them for you on starting the registration application.

Reserve your desired name

Once you have created an account and gathered required documents / information, check the availability of the name of your proposed business. Criteria for acceptable names that they are:

1. Unique
2. Appropriate
3. Not identical of already registered company or LLP
4. Not same as the name of already registered company or LLP
5. Not a prohibited by corporate law
6. Not designed to exploit the sovereignty of Pakistan
7. Not designed to exploit the religious sentiments of people

The portal asks for three names and significance of your proposed name. Suggest three names. Write the reason for using the proposed name in “significance”.  

Also remember: eZfile gives two options for company registration – separate and combined. In the separate process, name is allowed first, then the process of registration starts after the name reservation. For the combined process, name reservation is part of registration.

Complete online registration application

Next step to complete online application. Just enter following information in the respective areas / tables / boxes of the form then click submit.

1. CNIC number, full name, father’s name, residential address(es), mobile number and email address of all the directors and shareholders including CEO.
2. Authorized share capital
3. Face value of shares and number of shares taken by the directors. The form will auto calculate total paid up capital
4. Company name, address, registered office address, principal line of business (main business objects), email, website, telephone

Remember: you have an option to register with EOBI and social security institute when you are registering your company. Therefore, SECP asks to enter your information two times – one for the company and other for the 3rd parties. 

Digitally sign the application

When you create an account on LEAP portal, it sends you PIN via SMS and email. This PIN is your digital signature. Before submission, enter the provided secret PIN of 4 digits then verify the process. Repeat these digital signatures for all the directors one by one.

Remember: save your PIN. If you have forgotten it, you can retrieve it by requesting on LEAP in the update profile menu.

Submit your process

Once the registration application is signed with the PIN(s), it becomes enabled for the submission. On submitting it, portal will generate payment challan which can be paid online via:

1. EasyPaisa
2. Jazz Cash
3. Credit Card
4. Debit Card
5. Any digital banking application 
6. Link 1 challan

Remember: Carefully cross check the particulars before submitting the application. Once you have submitted, to amend it will take 2 to 4 hours for updating information. After the payment of challan, you can not update anything in the provided particulars until SECP reverts back the process,

Get the company registered

The Registrar (SECP officer) will manually check the application before his final approval. For any discrepancy, he reverts back the application. He also sends an email for his approval and objection. 

SECP will issue digital copies

Lastly, you will receive an email for the confirmation of your company registration. The email will contain:

1. Digital Certificate of Incorporation
2. Acknowledgment of filing of registration application
3. Digital copies of company documents 

SECP issues following digital copies if you check mark option of issuance of digital copies;

1. Memorandum of Association
2. Articles of Association
3. Certificate of incorporation 
4. Registration Application

Final Thoughts

That’s the whole process of registration. SECP already has published a user guide for it. You can register your company yourself. However, it will consume your time. To save your time and effort, we are here to help you. 

Talk to us and feel relaxed. Your company will be registered with SECP without your headache. 

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