Single Member Company (SMC)

A Single Member Company (SMC) is a private limited company with only one shareholder. This structure provides the flexibility of sole ownership while offering limited liability, ensuring that personal assets are protected. SMCs are governed by the Companies Act, 2017, and regulated by the Securities and Exchange Commission of Pakistan (SECP).

Benefits

  • Limited Liability:
    The shareholder’s liability is limited to their investment in the company.
  • Business Continuity:
    A nominee director ensures smooth operations in case of the owner’s death or incapacity.
  • Credibility:
    Enhanced trust and reputation with clients, suppliers, and investors compared to unregistered businesses.
  • Tax Advantages:
    Potential tax benefits exclusive to registered companies.
  • Ownership Control:
    Complete control over decisions while operating as a formal corporate entity.

Required Documents
To register an SMC in Pakistan, you will need:

  1. CNIC of the sole shareholder and nominee.
  2. Proof of registered office address (utility bill or rental agreement).
  3. Memorandum of Association (MoA) – outlines the company’s objectives.
  4. Articles of Association (AoA) – details governance and operational rules.
  5. Declaration of compliance.
  6. Digital signatures for electronic submissions.

Registration Process

  1. Name Reservation:
    • Submit an application via the SECP e-Services portal.
    • Pay a nominal fee for name reservation.
    • Obtain SECP approval for the proposed company name.
  2. Document Preparation:
    • Draft the Memorandum of Association (MoA) and Articles of Association (AoA).
    • Include nominee details to act in case of the owner’s incapacity.
  3. Incorporation Application:
    • Fill out Form A through the SECP e-Services portal.
    • Upload the required documents, including digital signatures.
    • Pay the incorporation fee based on the authorized capital.
  4. SECP Approval:
    • SECP reviews the application and documents.
    • Upon approval, receive the Certificate of Incorporation.

Post-Incorporation Requirements

  • Register for a National Tax Number (NTN) with the Federal Board of Revenue (FBR).
  • Open a corporate bank account.
  • Comply with any additional industry-specific registrations (e.g., sales tax).

Legal Framework

  • Companies Act, 2017:
    Provides provisions for incorporation, regulation, and management.
  • SECP Regulations:
    Detailed guidelines for SMC governance and compliance.

Why Choose an SMC?
A Single Member Company is ideal for entrepreneurs who want full ownership and operational control while benefiting from the advantages of a corporate structure, such as limited liability and increased credibility.