Disclaimer
The information provided here is for general guidance only and does not constitute legal advice. For professional advice regarding company incorporation, property, or real estate matters, contact City Laws Associates.
Navigating Non-Profit Company Registration Law in Pakistan: A Comprehensive Guide
This guide explains the legal framework for registering non-profit companies in Pakistan, including licensing, governance, foreign participation, tax exemptions, and compliance under section 42 of the Companies Ordinance, 1984.
Frequently Asked Questions – Non-Profit Company Registration in Pakistan
1. Does a non-profit company/organization need a license?
Yes, under section 42 of the Companies Ordinance, 1984, a license from the Securities & Exchange Commission of Pakistan (SECP) is mandatory before registering as a company limited by guarantee.
2. For how many years is the license issued?
The license is issued for five years and can be renewed in subsequent five-year terms.
3. How many members are required to form a non-profit association?
A minimum of three members is required to form a non-profit company or association under section 42.
4. Can a non-profit company have multiple objectives?
Yes, non-profit companies are allowed to pursue multiple objectives, provided they align with charitable, educational, scientific, social, or similar purposes.
5. What happens to assets on company closure?
Upon dissolution, surplus assets or property must be transferred to another section 42 company with similar or identical objectives.
6. Are foreigners allowed to form non-profit associations?
Yes, foreigners can serve as trustees or participate in non-profit companies without restrictions.
7. Can the license under section 42 be revoked?
Yes, the SECP can revoke a license. The company loses its exemptions, but notice and a hearing are provided before revocation.
8. Is there a minimum paid-up capital requirement?
No, section 42 non-profit companies are not required to have a minimum authorized or paid-up capital.
9. Can a non-profit company operate outside Pakistan?
Yes, the Companies Ordinance, 1984 does not restrict non-profit companies from conducting activities internationally.
10. Can one person act as the sole director and officer?
No, at least three trustees are required for governance under the Companies Ordinance, 1984.
11. Can non-profit companies pay salaries to directors or officers?
Employees may receive reasonable compensation for services.
Trustees/directors cannot receive a salary or remuneration.
12. Is a non-profit company tax-exempt?
Non-profit companies may be tax-exempt, but they must apply separately to the Commissioner of Income Tax to obtain tax-exempt status.
