While most companies in Pakistan are not registered and seem to operate without legal obligations, it is mainly due to the lack of awareness. Company owners in Pakistan need to learn about the great benefits of registering a company in Pakistan. Instead, they believe that in the future, without any legal work would help them save excessive profits. However, the truth is otherwise. Getting your company registered in Pakistan saves you from legal repercussions and offers a wide range of benefits you cannot even think of.
If you’re also trying to decide whether to get your company registered in Pakistan or not, this blog post explains some of the benefits you can enjoy by doing so and taking your business to new heights.
Top Benefits of Company Registration in Pakistan
1) Unlimited Life
Limited liability companies are considered to be separate legal entities from their directors, and the existence of a company is not limited in any way. When the lone proprietor dies, the business closes. On the other hand, a company may continue to function normally even after a director’s untimely demise.
2) Limited Liability
Limited liability is a feature of corporations but not sole proprietorships or partnerships. A business owner who purchases goods to the tune of Rs. 5 million on credit but loses everything in a fire the following day would have to liquidate personal assets to pay back his supplier. If the company goes bankrupt, you will lose your investment but will not have to pay anything out of your money
3) Easy Ownership Transfer
A private limited corporation makes it easy to transfer ownership from one person to another, such as a parent to a son or a sister to a brother.
In Pakistan, companies tend to be seen favorably compared to alternative business structures. The public and the firm’s other stakeholders see it favorably as a consequence. Yet, it might be misleading.
5) Tax Benefit
Pakistani income tax law does not prohibit directors from receiving compensation from their own company. However, when it comes to salaries, company owners are not allowed to take them, but corporate directors can. To reduce your taxable income, you might use this strategy to maximize your business’s operating loss.
6) Corporate Governance
Limited firms are governed by the Companies Act 2017 (formerly The Companies Ordinance 1984). Accordingly, they must adhere to strict protocols, divulge regulations, and meet various legal requirements to be better organized and generate wealth for their shareholders.
How to Register a Company in Pakistan?
Now that you’re convinced of the great benefits of company registration in Pakistan, you must wonder how to do that. And we’ve got your back by listing a detailed description of the entire process in easy-to-grasp words.
Step 1: Registering the Company Name
Selecting a company name is the first step in registering a business in Pakistan. Finding a name for your company that will help you stand out from the crowd is essential.
Comply with all restrictions and norms. For example, check that your company’s name doesn’t contain any offensive phrases.
Step 2: Submitting Required Forms
After receiving the company name approval, the next step is to file the necessary paperwork with the Securities and Exchange Commission of Pakistan (SECP).
Step 3: Certificate of Incorporation
As soon as a document is handed in, the SECP reads it. They ensure the genuineness of the item in question. Digital signatures are available via the SECP and are issued by the National Institutional Facilitation Technologies (NIFT).
The company also offers an incorporation certificate. In certain cases, a business presentation is necessary. It all depends on the company’s origins, however.
Step 4: Put up a Deposit for Stocks
After registering, shareholders must transfer the necessary funds to the company’s bank account to get their shares.
Step 5: Turn In Your Business, Income, and Professional Taxes
Registration with the Federal Board of Revenue (FBR) and obtaining a national tax number is the last step in setting up a legal business entity in Pakistan (NTN). After that, a sales tax ID number may be applied for if necessary
Are you feeling overwhelmed by the complex process? Then, feel free to connect with Active Filer experts; they’ll ease your hassle by assisting!
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