Tax Knowledge Centre · Company law
SECP company types in Pakistan explained
An overview of the business entities registered by SECP: private limited company, single member company, public company, company limited by guarantee and LLP.
Key points
- Companies are incorporated with SECP under the Companies Act, 2017.
- Private limited companies and single member companies are the most common choices for new businesses.
- Limited liability partnerships (LLPs) are also registered with SECP, under separate legislation.
Who registers companies?
The Securities and Exchange Commission of Pakistan (SECP) incorporates and regulates companies under the Companies Act, 2017. Incorporation is done online through SECP’s systems.
Private limited company
A private company limits the right to transfer shares, cannot invite the public to subscribe for its shares and has a restricted maximum number of members. Liability of members is limited to their shareholding. It is the usual choice for small and medium businesses with two or more owners.
Single member company (SMC)
An SMC is a private company with only one member. It gives a sole owner the benefits of a separate legal entity and limited liability. SECP’s rules require the SMC to nominate persons to act in specified circumstances.
Public company
A public company can be listed on a stock exchange or unlisted. Public companies have more extensive governance, disclosure and audit requirements, and are typically used for larger enterprises.
Company limited by guarantee and not-for-profit companies
Companies limited by guarantee, and companies licensed for not-for-profit purposes, are used for associations, trade bodies and charitable objectives. They have specific licensing and governance rules.
Limited liability partnership (LLP)
An LLP combines features of a partnership with limited liability for partners. LLPs are registered with SECP under the Limited Liability Partnership Act, 2017.
Choosing between them
Consider liability, the number of owners, investment plans, compliance cost and tax position. For a broader comparison including sole proprietorships and partnership firms, read choosing a business structure in Pakistan. When you are ready, see our company registration service.
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