::Non-Profit Company Registration in Pakistan

Non-Profit Company Registration in Pakistan

FAQs: Registration of a non-profit (NPO / NGO) under Societies Act, 1860

Laws related to NGO’s/NPO’s in Pakistan

Frequently Asked Questions (FAQs) on registration of non-profit company in Pakistan which is another option than registering a non-profit under Societies Act:

Q. Is a non-profit company/organization need to obtain licence also?

A. Yes. Any such company/organization is required to obtain licence under section 42 of the Companies Ordinance, 1984 from the Securities & Exchange Commission of Pakistan prior to its registration as a company limited by guarantee.

Q. For how many years licence is issued?

A. The licence is issued for a period of five years and is renewable for further term of five years each.

Q. Minimum how many members can form an association not for profit under Companies Ordinance, 1984?

A. Minimum three members can form an association/company not for profit, the association be registered as a company with limited liability, without the addition of the words “Limited”, “(Private) Limited” or “(Guarantee) Limited”.

Q. Can non-profit company incorporated under Companies Ordinance, 1984 have multiple objects?

A. Yes, non-profit company is allowed to have multiple objects.

Q. In case of closing the non-profit company where will assets or property of the said company go?

A. In case of winding up or dissolution of the Company, any surplus, assets or property, after the satisfaction of all debts and liabilities be given or transferred to some other company established under section 42 of the Companies Ordinance, 1984, having similar or identical objects .

Q. Are foreigners are allowed to form non-profit association/company under section 42 of the Companies Ordinance, 1984?

A. There is no bar on foreigners becoming trustees of a non-profit company.

Q. Can licence granted under section 42 of the Companies Ordinance, 1984 be revoked?

A. The licence granted under section 42 of the Companies Ordinance, 1984 can be revoked by the Securities & Exchange Commission of Pakistan and upon revocation, the Registrar shall enter the word “Limited” or “Private Limited” at the end of the name of the company and the company shall cease to enjoy the exemption granted under section 42 of the Companies Ordinance, 1984. Before licence is revoked Securities & Exchange Commission of Pakistan shall give notice in writing of its intention and an opportunity be given of being heard in opposition to revocation?

Q. Does a non-profit company wanting to get registration under section 42 of the Companies Ordinance, 1984 requires to have minimum paid up capital as required by other companies of registered under Companies Ordinance, 1984?

A. No. A non-profit company registered under section 42 shall not be required to have minimum authorized paid up capital.

Q. Can a non-profit company registered under section 42 of the Companies Laws of Pakistan have activities outside Pakistan?

A. Companies Ordinance, 1984 do not prohibit activities outside Pakistan.

Q. Can one person be the sole director and officer of a nonprofit company in Pakistan?

A. No. The Companies Ordinance, 1984 under which nonprofit companies are incorporated requires a nonprofit company to have at least three trustees.

Q. Can a nonprofit company pay a salary to its directors, officers and employees?

A. A nonprofit company may pay reasonable compensation for services rendered to the employees of the company but the trustees cannot draw any salary or remuneration.

Q. Is a nonprofit company a tax-exempt entity? If not, how do I become tax exempt?

A. Charities are potentially exempt from tax on most forms of income provided that the funds are applied solely in furtherance of the charity’s objects. A nonprofit company is not automatically exempt from income tax or other taxes. To become exempt the association must meet certain requirements and apply to Commissioner Income Tax for exemption.

We successfully dealt with incorporation of various nonprofit companies under section 42 of the Company Ordinance, 1984 including registration of nonprofit company for education; nonprofit company for sports; nonprofit company for charity activities; nonprofit company for arts, sciences and literature; nonprofit company for culture and heritage activities; nonprofit company for health services activities; nonprofit company for social infrastructure and human resource development activities; nonprofit company for rural support programme activities; nonprofit company for religious activities; nonprofit company for professional Institutions activities; and nonprofit company for special education activities.

We can advise you on registration of a NGO / NPO and other related matters to individuals, firms, companies both local and foreign.

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