Frequently Asked Questions (FAQs)

Section-I
New Company Registration / New Company Formation /Incorporation of a Company in Pakistan:

http://www.sbconsulting.com.pk/faqs-2/

What is Company?
Companies Ordinance, 1984 has defined Company as under;
“Company means a company formed and registered under Companies Ordinance, 1984 or an
existing company.”
According to Wikipedia “A company can be defined as an “artificial person”, invisible,
intangible, created by or under law, with a discrete legal entity, perpetual succession and a
common seal. It is not affected by the death, insanity or insolvency of an individual member.”
“company limited by shares” means a company having the liability of its members limited by
the memorandum to the amount, if any, unpaid on the shares respectively held by them;
“company limited by guarantee” means a company having the liability of its members limited
by the memorandum to such amount as the members may respectively thereby undertake to
contribute to the assets of the company in the event of its winding up;

Who can form a company in Pakistan?

One or more persons can form a company for any lawful purpose by subscribing their name(s)
to the Memorandum of Association and complying with the legal requirements for
incorporation. Those persons who subscribe their names to the Memorandum of Association
are known as “subscribers”, and are the first shareholders of the company.

o Anybody can form a company in Pakistan under the rules and regulation by Pakistani
governments.
o A person must be 18 years old.
o Not a bankrupt

How long it takes to get private limited company registered in Pakistan?

The Private limited company may register in Pakistan in as low as 4 (four) hours, provided
documents are proper and complete and filed under fast track. However, through normal
process it can be registered in 3 – 5 working days.

What is the minimum capital requirement to register a private limited company?

The requirement of minimum capital to register a private limited company is not fixed.
However, normally it is Rs. 100,000/- for authorized capital. Paid up Capital can be as low as Rs.
2, or Rs. 20 or Rs. 200.

How many kinds of company registered in Pakistan?

Under Companies Ordinance, different kinds of companies can be registered in Pakistan as
follows:
o Private Limited Company normally known as Pvt. Ltd
o Single Member Private Limited Company (SMC) i.e. (SMC-Pvt.) Ltd
o Public Limited Company (Un-Listed)
o Not for Profit Company (NGOs etc.)
o Company Limited by Guarantee
o Un Limited Company

How many members are required to start a company?

i. For Private Limited Company minimum 2 members are required.
ii. Whereas a Single Member Private Limited Company (SMC) can be formed by only
one person. However an SMC will must have a Company Secretary.
iii. For Public Limited (Un-Listed) Company minimum 3 members are required.
iv. For Public Limited (Listed) Company minimum 7 members are required.

Can I form a company with just one person?

Yes, a company needs to have one director and one shareholder and the same person can fulfill
both those roles in Single Member Private Limited Company. However, his Company name will
appear for example as ABC (SMC-Pvt) Limited.

What information do I need to supply?

Our questionnaire will ask you a range of questions. It will ask you for the proposed name of
your new company, the names and addresses of people involved (promoters directors,
shareholders) and the official address for the company.

What do I receive when everything is complete?

You will receive the official Certificate of Registration (Certificate of Incorporation).
What is meant by registered office?
Registered office is the official address of your company where the correspondence can be
exchanged between the company and his clients. Any change in your address must be informed
to Security & Exchange Commission of Pakistan (SECP) through Form 21.

Section-II
Matters after Company Registration in Pakistan / Company Formation /Incorporation of a
Company:
Can I increase paid-up capital of my company in future? Is it possible?
Yes, you can increase your paid-up capital, even after registration of your company but subject
to compliance of the requirement of the company ordinance, 1984.
Can I change my company name after incorporation?
Yes, company name can be changed any time after incorporation by passing special resolution
by a members and certificate of name issued by the Security & Exchange Commission of
Pakistan (SECP) in whose jurisdiction the registered office of the company is situated.
What is the minimum number of officers a company requires?
Law requires private limited companies to appoint at least one director who is an individual. All
directors must be at least 16 years of age. A private company does not need to have a
secretary, but may choose to have one. However an SMC will must have a Company Secretary.
Non-Pakistani residents incorporate a local limited company in Pakistan?
Yes. Non-Pakistani residents may incorporate a local limited company in Pakistan. If you do not
often stay in Pakistan or you are not familiar with the incorporation procedures, it is advisable
for you to contact some local professional firms e.g. solicitors, accountancy or secretarial firms
etc. for advice and/or appoint them to act on your behalf to set up a company in Pakistan.
Can the registered office of a local limited company be situated outside Pakistan?
No. The registered office must be situated in Pakistan.
Can the Memorandum of Association (MoA) of a company be altered once approved?
Yes. Alteration in Memorandum of Association (MoA) is possible as per law.
Do all the companies have to keep accounting records?
Yes, all companies must keep accounting records as required under Companies Ordinance,
1984
What is a mortgage? how is it registered?
A mortgage involves the transfer of a title to an immovable property as security for the
repayment of a debt or the performance of an obligation. The person in whose favor property is
mortgaged acquires certain rights in the property such as right to sell the mortgaged property
in case the debt is not repaid. The mortgage becomes void upon the payment of debt or the
performance of the obligation upon the terms stipulated.
Whether the listed companies are required to prepare consolidated quarterly accounts?
Yes, the listed companies are required to prepare and circulate the consolidated quarterly
accounts as per requirements of section 237.
How a person can become and cease to be a member of a company?
In a company Limited by share or company having share capital, a person becomes members on
allotment or transfer of share in his name. A subscriber is always a member whether he has
share or not. Any person whose name is entered in the register of members he becomes a
member and when name is omitted from the register, he ceases to remain member of the
company.
Does the company have power to issue the shares at discount?
A company can issue shares at discount subject to the conditions contained in section 84 of the
Ordinance
Can limited company may have directors with unlimited liability?
One or more directors of a limited company may have unlimited liability and they should have
knowledge of the facts that they have unlimited liabilities
A company wishes to borrow a loan for the purpose of its business. Can it do so even if no
express provisions are contained in its memorandum of association?
Borrowing loan is an incidental and ancillary provision for doing principle line of business, so it
is not necessary that such provision is contained in the memorandum of association of a
company it provides comfort to the borrowers and lender if such provision is contained therein.
A private limited company wants to commence business after incorporation without getting
certificate of commencement of business. Is it possible?
A private company is exempt from this provision of section 146 and it commences business just
on incorporation and is not required to obtain certificate for commencement of business.
Which meeting of the company are General meeting?
The following are the General meeting of the company;
o Statutory meeting
o Annual General Meeting
o Extra ordinary General meeting

What are the requirements of filling of special resolutions?

A printed or typed copy of every special resolution on Form 26 shall, within fifteen days from
the passing thereof, be filled with the registrar duly authenticated by the chief executive or
secretary of the company.
To whom notice of General meeting is circulated?
The notice of general meeting is issued to the following;
1) Members of the company
2) Auditors of the company
3) Successor or heir or nominee of the deceased member (if the interest of such person
is known to the company)
4) Commission/registrar of the company

What is a special resolution?

A special resolution is a resolution passed at a general meeting of the company by 75% of those
members entitled to vote.
What happens if accounts or annual returns are not filed?
Failure to deliver documents on time is an offence under the Ordinance. On conviction, a
director could be penalized with a fine and also debarred from becoming director.
Does every company need a secretary?
No. Companies Ordinance requires only a listed company to have a whole time secretary and a
single member company to have a secretary.
Does a company secretary need any qualifications?
The secretary to be appointed by a listed company shall be a member of a recognized body of
professional accountants, or a member of a recognized body of corporate / chartered
secretaries or a person holding a masters degree in Business Administration or Commerce or is
a Law graduate from a university recognized by Higher Education Commission and having at
least two years relevant experience. Further, a person being engaged by a public listed
company as secretary before the 26th October, 2002 is permitted to continue as such if he has
practical experience of five years in that position. However, the company secretary of a single
member company shall be a person holding a bachelor degree from a university recognized by
the Higher Education Commission.
How can I change my company name?
A company can change its name by:
special resolution; or
by means provided for in the company’s articles
What is Quorum?
Quorum means a certain minimum number of members of a company as are competent to
transact business in a general meeting of members in the absence of the members.
When the first Auditor is appointed?
The first auditor of the company shall be appointed by the directors within 60 days of
incorporation of the company.
Who is proxy?
Proxy is a person appointed to vote and speak on behalf of a member in general meeting of the
company.
Who can be appointed as a director?
Generally it is up to the members to appoint the people they believe will run the company well
on their behalf. The ineligibilities that prevent anyone becoming a director are;
If he:

 is a minor;
 is of unsound mind;
 has applied to be adjudicated as an insolvent and his application is pending;
 is an undischarged insolvent;
 has been convicted by a court of law for an offence involving moral turpitude;
 has been debarred from holding such office under any provision of this Ordinance;
  has lacked fiduciary behavior and a declaration to this effect has
 been made by the Court under section 217 of the Ordinance at any time during the
preceding five years;
 is not a member ; This disqualification shall not apply in the case of a person
representing the Government or an institution or authority which is a member, a whole-
time director who is an employee of
 the company, a chief executive or a person representing a creditor;

What are the consequences of non-presentation of Annual Accounts in the Annual General
Meeting?
It is the responsibility of the Board of Directors of a company to maintain proper books of
accounts get the annual accounts audited by the auditor of the company, present the audited
accounts before the Annual General Meeting for approval of the members within the
prescribed period as provided under the law. In case of non-compliance, in filing the statutory
returns within prescribed period and apart from the other penalties for violating the specific
provisions of the Ordinance, which include heavy amounts of fines and prosecution of the
management leading to imprisonment of the defaulting directors/officers are liable to pay
additional fee (as discussed at para-5 of the guide.
Can I obtain information about a company from Commission and the Registrar?
Yes. Company information is vital for informed decision-making. In the concerned Company
Registration Office, you’ll find information on every company registered with the CRO, from
names and addresses to annual returns and accounts. But note that private companies do not
have to file their accounts.
You can also get information about foreign companies that establish a place of business in this
country or open a branch here. You can order a company search by contacting us.
What are different modes of winding up a company?
The winding up of a company may be either-
 by the Court; or
 voluntary; or
 subject to the supervision of the Court.
Who is competent to file petition for winding up in the Court?
Petition may be presented by any one of the following:
The company may itself by passing a special resolution
1) Creditor or Creditors.
 2) Any contributory or contributories
3) Registrar of Companies
4) Securities and Exchange Commission of Pakistan or by a person authorized by the
Commission.

Section-III
Conversion of Companies:
Can I convert the status of the company?
Yes, you can convert the status of your company. Following are the types of conversion of
companies;
 Private company into public company
 Public company in to private company
 Private company in to Single Member Company
 Single Member Company into Private Company

How to convert private company into public company?

Section 45 of the Ordinance provides that a private company may convert its status into a
public company by altering its articles of association in such a manner that they no longer
include the provisions which, under clause (28) of sub-section (1) of section 2 of the Ordinance,
are required to be included in the articles of association of a company to constitute it as a
private company. The company shall:-
a) on the date of the alteration, cease to be a private company; and .
b) within a period of fourteen days after the said date, file with the registrar either a
prospectus or a statement in lieu of prospectus.
No approval of any authority for the conversion of status from a private company into public
company is required.
How to convert public company into private company?
A public company can be converted into a private company with the prior approval in writing,
and subject to such conditions as may be imposed by the Securities and Exchange Commission
of Pakistan (Commission) in terms of section 44 read with section 28 of the Ordinance and in
compliance with rules7, 28, 30, 32 and 34 of the Rules. Under rule 7 of the Rules, where the
articles of association of a public company have been amended having the effect of converting
its status from public company into a private company, the company is required to make an
application not later than sixty days from the date on which the special resolution seeking such
alteration was passed, on Form 2 to the Commission for its approval under section 44 of the
Ordinance.

How to convert single member company in to private company?

A single member company (originally incorporated as Single Member Company or converted
from private company as such) may convert into private company in accordance with rule 4 of
the SMC rules. The persons becoming members due. to transfer or transmission or further
allotment of shares, as the case may be, shall pass a special resolution to make alteration in
articles and appoint one or more additional directors. Where a single member company
converts into a private company pursuant to sub-rule (1), it shall file a notice of the fact in
writing in the form as set out in Form S-2 with the registrar within 30 days from the date of
passing of special resolution. A single member company may be converted into a private
company on increase of the number of its members to more than one due to transfer of shares
or further allotment of shares or death of the single member or operation of law as provided in
rule 4 of SMC Rules. No approval of any authority for the conversion of status from a Single
Member Company into Private Company is required.

Section-IV
Foreign Company Registration in Pakistan and matters thereafter:
Can a foreign company adopt any name it likes or if there are any restrictions?
Foreign Company can establish a principal place of business in Pakistan in the name of the
company registered in the country of origin.
Is a foreign company required to obtain any other permission from any other organization for
opening and maintaining of its branch/liaison office in Pakistan?
A foreign company desirous of setting up a branch or liaison office is required to obtain
permission from the Board of Investment, Government of Pakistan.
For how long Board of Investment grants permission to open a branch/liaison office of
foreign company in Islamic Republic of Pakistan
The permission for opening of branch/liaison office is granted by the Board of Investment for an
initial period of three to five years. Copy of such permission letter is required to be furnished
with the documents meant for registration of a foreign company.
After expiry does branch/liaison need permission again from Board of Investment?
Yes, after expiry renewal/extension of the permission to open/maintain a branch/liaison office
is also required to be obtained from the Board of Investment on the expiry of the validity period
of the permission originally granted. Whenever such renewal/extension is granted, a copy must
be furnished to the Registrar SECP concerned. Further extension is granted after reviewing the
performance of the entity during the initial period

Memorandum and Articles of Association of a foreign company, is in language other than

English will Securities & Exchange Commission of Pakistan will accept them?
According to Rule 23 of Companies (General Provisions and Forms) Rules, 1985, if the document
constituting charter, statute or memorandum and articles of association is not in English or
Urdu, duly certified translation in English or Urdu language is required to be provided. Where
any such translation is made outside Pakistan it shall be authenticated by the signature and seal
of the public officer or Notary Public in the country where the company is incorporated,
provided that signature or seal of the person so certifying shall be authenticated by a Pakistan
diplomatic consular or consulate officer.

Within how many days foreign company is required to deliver requisite documents to the
Registrar Securities & Exchange Commission of Pakistan?
Every foreign company which establishes a place of business in Pakistan has to deliver the
requisite documents to the registrar concerned within thirty days of establishment of a place of
business in Pakistan.
What type of certification is required for the documents constituting or defining the
constitution of a foreign company?
As per Rule 22 of Companies (General Provisions and Forms) Rules, 1985 a copy of any charter,
statute, memorandum, articles or other instrument, constituting or defining the constitution of
a foreign company is required to be duly certified by:-
• the public officer in the country where the company is incorporated to whose custody
the original is committed; or
• a Notary Public of the country where the company is incorporated; or
• an affidavit of a responsible officer of the company in the country where the company is
incorporated.
The signature and seal of the official referred above or the certificate of the Notary Public
referred above shall be authenticated by a Pakistani diplomatic consular or consulate officer.
Whether a foreign company is required to file any document to the registrar concerned on
change or alteration therein?
Yes, foreign company is required to notify registrar on any change or alteration of the
documents.

What is meant by Global Accounts?

Global accounts are the accounts which a foreign company files with the authorities in country
of origin. If a foreign company is not required to file the Accounts in country of origin, it shall
prepare Global Accounts and get the same audited for purpose of filing of such accounts under
the Companies Ordinance, 1984 like a public company.
Are there any statutory obligations for the foreign companies?
According to Companies Ordinance, 1984 a foreign company is required to comply with the
statutory obligations i.e.
To maintain at its principal place of business in Pakistan a register of Pakistani members and
debenture holders, directors and officers, which shall be open to inspection.

In every prospectus inviting subscriptions for its shares or debentures in Pakistan, state the
country in which the company is incorporated.

Conspicuously exhibit on the outside of every place where it carries on business in Pakistan the
name of the company and the country in which the company is incorporated in letters easily
legible in English or Urdu characters and also, if any place where it carries on business is beyond
the local limits of the ordinary civil jurisdiction of a High Court, in the characters of one of the
vernacular language used in that place. Cause the name of the company and of the country in
which the company is incorporated mentioned in legible English or Urdu characters in all bill-
heads and letter papers, and in all notices, advertisements, documents and other official
publication of the company.

If the liability of the members of the company is limited, cause notice of that fact to be stated in
legible English or Urdu characters in every prospectus inviting subscription for its shares, all
letter papers, bill heads, notices, advertisements, and other official publications of the company
in Pakistan, and to be exhibited on the outside of every place where it carries on business in
Pakistan.

Is there any exclusion to foreign companies to deliver accounts?

No there is no exclusion, all foreign companies must deliver accounts in Pakistan, and accounts
would be prepared and adjusted like a public company.

Are provisions of Companies Ordinance 1984 for registration of mortgage and charges are
also applicable to foreign companies?
Yes, all the provisions of Companies Ordinance, 1984, as applicable to other companies, relating
to the registration of mortgage and charges are also applicable to a foreign company.
Does books of account to be kept by a foreign company?
According to section 230 of the Companies Ordinance, 1984 every company shall keep at its
registered office proper books of account, the provisions of the said section also apply to the
foreign companies
Do a foreign company need to intimate registrar before closure of its business in Pakistan?
Any foreign company at least thirty days before it intends to cease to have any place of
business in Pakistan give a notice of intention to the concerned registrar and publish a notice of
such intention at least in two daily newspapers circulating in the Province or Provinces in which
such place or places of business are situate. As from the date of intention to cease to have any
place of business in Pakistan stated in the notice, unless the said date is by a similar notice
altered, the obligation of the company to deliver any document to the registrar shall cease,
provided it has no other place of business in Pakistan.
If a foreign company having an established place of business in Pakistan goes into liquidation
in the country of origin then what procedure is to be adopted in Pakistan?
If a foreign company having an established place of business in Pakistan goes into liquidation in
the country of its incorporation then it shall within thirty days give notice thereof to the
registrar, and simultaneously publish a notice at least in two daily newspapers circulating in the
Province or Provinces in which its place or places of business are situated and furnish to the
registrar within thirty days of the conclusion of the liquidation proceedings all returns relating
to the liquidation and the liquidation account in respect of such portion of the company’s
affairs as relates to its business in Pakistan. Publish a statement on every invoice, order, bill-
head, letter paper, notice of other publication in Pakistan that the company is being wound up
in the country of its incorporation. Where a company has been dissolved, ceased then no
person shall after the date of such dissolution or cessation, carry on, or purport to carry on , any
business in Pakistan in the name or on behalf of such company.

If a foreign company in Pakistan fails to comply with provisions of Companies Ordinance,

1984 is there any penalty?
If any foreign company fails to comply with any of the provisions of the Companies Ordinance,
1984 then, the company and every officer or agent of the company who knowingly or willfully
authorizes or permits the default, shall be liable to fine.
Are foreign companies are required to be registered with tax authorities in Pakistan?
Yes, Liaison/Branch office is required to be registered with the Tax Authorities in Pakistan.
What is meant by Foreign Company?
Foreign Company is a company registered outside Pakistan under a foreign law other than
Pakistani law and establishes its place of business in Pakistan.
Is registration of foreign company is mandatory with Securities & Exchange Commission of
Pakistan?
Yes, registration of a foreign company with Securities & Exchange Commission of Pakistan is
mandatory.
What are the requirements for a foreign company opening a branch in Pakistan?
A foreign company can establish a principal place of business in Pakistan after complying with
the legal requirements laid down under section 452 to 460 of the company ordinance, 1984.
Is a foreign company required to obtain any other permission from any other organization for
opening and maintaining of its branch/liaison office in Pakistan?
Yes, a foreign company desirous of setting up a branch or liaison office is required to obtain
permission from the Board of Investment, Government of Pakistan.
What type of certification is required for the documents constituting or defining the
constitution of a foreign company
As per Rule 22 of Companies (General Provisions and Forms) Rules, 1985 a copy of any charter,
statute, memorandum, articles or other instrument, constituting or defining the constitution of
a foreign company is required to be duly certified by:-
 The public officer in the country where the company is incorporated to whose custody
the original is committed; or
 A Notary Public of the country where the company is incorporated; or
 An affidavit of a responsible officer of the company in the country where the company is
incorporated.
The signature and seal of the official referred above or the certificate of the Notary Public
referred above shall be authenticated by a Pakistani diplomatic consular or consulate officer.
Whether a foreign company is required to file any document to the registrar concerned on
change or alteration therein?
Yes, foreign company is required to notify registrar on any change or alteration of the
documents.
Are foreign companies are required to be registered with tax authorities in Pakistan?
Yes, Liaison/Branch office is required to be registered with the Tax Authorities in Pakistan.
Does books of account to be kept by a foreign company?
According to section 230 of the Companies Ordinance, 1984 every company shall keep at its
registered office proper books of account, the provisions of the said section also apply to the
foreign companies
If a foreign company in Pakistan fails to comply with provisions of Companies Ordinance,
1984 is there any penalty?
If any foreign company fails to comply with any of the provisions of the Companies Ordinance,
1984 then, the company and every officer or agent of the company who knowingly or willfully
authorizes or permits the default, shall be liable to fine
What are the requirements for a foreign company opening a branch in Pakistan?
A foreign company can establish a principal place of business in Pakistan after complying with
the legal requirements laid down under section 452 to 460 of the company ordinance, 1984.

Section-V
Company Not For Profit /NPOs /NGOs/INGOs/Section 42:
How many members are required to start a trust?
A trust can be started with minimum numbers of two an author and the trustee.
What are the benefits to register the NGO?
You can get many benefits after registering the NGO. All NGO’s including international NGO is
also eligible for certain tax exemptions. Charities are also exempt from tax. Registered NGO’S
also sign contracts and have ability to qualify for financial assistance.
What documents are required to submit in Central Board of Revenue?
It is necessary for NGO’S taken benefits from tax exemptions to submit annual audited
accounts, list of donors and beneficiaries and other financial information to Central Board of
revenue.
Can I establish the NGO for sports?
Yes, you can establish the NGO for the following purposes;

 Commerce
 Science
 Sports
 Religion
 Social services
 Charity
 Any other useful object

How many steps are required to register the NGO?

There are mainly three steps are required to form the NGO
Availability of Name
Application to the commission for grant of license under section 42 of the ordinance
Registration of association as company limited by guarantee.
What are the legislations available in Pakistan under which an NGO can be registered?
In Pakistan an NGO or NPO can be registered under any of the following legislations;

 Companies Ordinance, 1984

 Societies Registration Act, 1860
 Trust Act,1882
 Voluntary Social Welfare Organizations Ordinance, 1961

Is an organization registered under section 42 do activities outside Pakistan?

Yes, Companies Ordinance 1984, do not prohibit activities outside Pakistan
How many years license is issued for NGO?
The license is issued for five years and renewable for period of five years.
Are foreigners are allowed to form non-profit association/company under section 42 of the
Companies Ordinance, 1984?
There is no bar on foreigners becoming trustees of a non-profit company.
Can non-profit company incorporated under Companies Ordinance, 1984 have multiple
objects?
Yes, non-profit company is allowed to have multiple objects
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?
No, A non-profit company registered under section 42 shall not be required to have minimum
authorized paid up capital.
Is a nonprofit company a tax-exempt entity? If not, how do I become tax exempt?
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.
Who is the signing authority of a registered society?
All the documents of a registered society to be filed with the Registrar should be signed by the
President/Chairman or the Secretary or by any person specifically authorized in this behalf by
the governing body.
Minimum how many members can form an association not for profit under Companies
Ordinance, 1984?
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”.
What is an annual return?
An annual return is a snapshot of certain company information at the made-up date. It is a
separate document from a company’s annual accounts

Section-VI
Intellectual property rights (IPRs):
What are intellectual property rights (IPRs)?
Intellectual property rights are those rights which arise from the work created by human
intellect such as a literary or artistic work, a process of inventing a particular product etc. These
rights give exclusive right to the creators of such work to use, perform, transfer or sell these
rights. The owners of these rights also have the right to initiate court proceedings against the
persons using these rights without their permission and or authority.
Will you provide services regarding Investment decisions?
Yes, we will assist you regarding Financing and investment decisions we will provide you
comprehensive business plan or feasibility report.
What is a trademark?
A trademark is a distinctive sign which identifies certain goods or services as those produced or
provided by a specific person or enterprise.
What is the Validity of Registration of Trademark?
Initially Trademark is registered for 10 (Ten) years from the filing date. The Trademarks
registration can be renewed after every 10 (Ten) years.
What does a trademark do?
A trademark provides protection to the owner of the mark by ensuring the exclusive right to
use it to identify goods or services, or to authorize another to use it in return for payment. The
period of protection varies, but a trademark can be renewed indefinitely beyond the time limit
on payment of additional fees. Trademark protection is enforced by the courts, which in most
systems have the authority to block trademark infringement.
What is copyright?
Copyright is one of a group of intellectual property rights (or laws) that are intended to protect
the interests of an author or copyright owner. In other words, these laws give an author/owner
nearly exclusive control over the use of his/her work.
Who can claim Copyright?
Copyright protection subsists from the time the work is created in fixed form. The copyright in
the work of authorship immediately becomes the property of the author who created the work.
Only the author or those deriving their rights through the author can rightfully claim copyright.
Who may file an application form?
The following persons are legally entitled to submit an application form;

 The author-(the person who actually created work)

 The copyright claimant-(either the author of the work or a person or organization that
has obtained ownership of all the rights under the copyright)
 The owner of exclusive right(s)
 The duly authorized agent-( Any person authorized to act on behalf of the author, other
copyright claimant, or owner of exclusive rights may apply for registration)
What works are protected by Copyright?
Copyright protects “original works of authorship” that are fixed in a tangible form of expression.
The fixation need not be directly perceptible so long as it may be communicated with the aid of
a machine or device. Copyrightable works include the following categories:
 Literary works
 Musical works, including any accompanying words
 Dramatic works, including any accompanying music
 Pictorial, graphic, and sculptural works\
 Motion pictures and other audiovisual works
 Sound recordings
 Architectural works

What is a Patent?
A patent for an invention is grant of exclusive rights to make, use and sell the invention for a
limited period of 20 years. The patent grant excludes others from making, using, or selling the
invention. Patent protection does not start until the actual grant of a patent. A patent cannot
be obtained on a mere idea or suggestion. Patent applications are examined for both technical
and legal merit.
What rights does a Patent owner have?
A patent owner has the right to decide who may or may not use the patented invention for the
period in which the invention is protected. The patent owner may give permission to, or license,
other parties to use the invention on mutually agreed terms. The owner may also sell the right
to the invention to someone else, who will then become the new owner of the patent. Once a
patent expires, the protection ends, and invention enters the public domain, that is, the owner
no longer holds exclusive right to the invention, which becomes available to commercial
exploitation by others.
What is patenting system?
The basic theory of the patent system is simple and reasonable. It is desirable in the public
interest that industrial techniques should be improved. In order to encourage improvement and
to encourage also the disclosure of improvements in preference to their use in secret. Any
person devising any improvement in a manufactured article or in machinery or methods for
making it, may upon disclosure of his improvement at the Patent Office demand to be given a
monopoly in the use of it for a limited period. After that period, it passes into the public domain
Who can apply for Patent protection in Pakistan?
Any of the following persons are entitled to make an application for Patent, Whether alone or
jointly with any other person, may make an application for a Patent, namely:-
The true and the first inventor or inventors of the invention or his or, as the case may be, their
assignee or successor -in -interest; and
The legal representative of any deceased person who immediately before his death was
entitled to make such application.
What is Industrial Design?
Industrial design (ID) is the professional service of creating and developing concepts and
specifications that optimize the function, value and appearance of products and systems for the
mutual benefit of both user and manufacturer.
Who Can Apply For A Design?
An inventor or any other person/company assigned by the inventor can apply and obtain the
registration for the design.

Section-VII
Audit and Tax Matters (NTN, GST, Withholding Tax, Income Tax, Sales Tax):
What is the purpose of an audit?
The purpose of an audit is the expression of an opinion as to whether the financial statements
are fairly presented in conformity with appropriate accounting principles.
What else do you do at audit?
We perform operational reviews of departments or units; reviews of departments for incoming
Chairs or at managements request; financial reviews; reviews of Information Systems areas
controls; contract compliance reviews; fraud investigations and more.
What records should be available for review?
The auditor will normally request some or all of the following records:
 Financial statements (income statement and balance sheet, including any schedules of
capital additions and deletions).
 The books from which these statements are derived (e.g., general ledger, sales journal,
purchases journal, general journal, cash receipts journal, cash disbursements journal).
 Source documents, such as sales invoices, purchase invoices, import documents, tax
returns, bank statements with cancelled cheques, and copies of deposit slips, contracts,
and agreements.
 Other records or correspondence that contains information pertaining to a tax issue.
If you have some records in storage, consult with the auditor to determine which documents
will be required before retrieving your records from storage.
What is internal Audit?
Internal control is the integration of the activities, plans, attitudes, policies, and efforts of the
employees of a department working together to provide reasonable assurance that the
department will achieve its mission.
Who is responsible for internal control?
Internal controls are the responsibility of all employees of the department; generally an
employee’s position will determine the extent of their involvement. Internal control is people-
dependent; it is developed by people, it guides people, it provides people with a means of
accountability and people carry it out. While everyone in a department has responsibility for
ensuring the system of internal control is effective, the greatest amount of responsibility rests
with the managers of the department. Internal controls are the structure, policies, and
procedures used to ensure that management accomplishes its objectives and meets its
responsibilities.
What is the frequency of internal and external audit?
Internal audit is performed during the entire year. External audit is performed at the end of the
year.
What is the Objective of Conducting an Audit of Financial Statements?
The objective of an ordinary audit: “to express an opinion as to the fairness with which the
financial statements present fairly, in all material respects, the financial position, results of
operations, and cash flows, in conformity with generally accepted accounting principles.”
What is Audit committee?
The audit committee is a committee of those charged with governance, responsible for the
oversight of a company’s financial reporting and accounting, financial regulatory compliance,
financial risk management processes, and the engagement of and interaction with the
company’s external auditor on behalf of the company’s shareholders. It is typically comprised
of a majority of independent non-executive directors.
What are the five phases of an Audit?
The five phases of an audit are
1. Planning
2. Risk Assessment
3. Audit Strategy & Plan
4. Gathering Evidence
 5. Finalization
What is a Taxable Income?
It is the total income of a person for a tax year reduced by the total of any deductible
allowances, under the Ordinance, for the year. A person is entitled to a deductible allowance
for the amount of any Zakat paid by the person in a tax year under the Zakat & Ushr Ordinance,
1980.
What is a Capital Value Tax (CVT) in Pakistan?
CVT is payable by individuals, firms and companies which acquire an asset by purchase or a
right to use for more than 20 years. It is also payable on import of motor vehicles.
What is an Appeal?
Appeals arise on account of disagreement between the taxpayer and the tax collectors (income
tax department) regarding the quantification of the taxable income and tax liability thereon as
well as levy of default surcharge, penalties, etc.
What is Wealth Statement?
Wealth statement is the detail of an individual’s, his/her spouse, minor children and other
dependents:
1. Assets and liabilities on a specified date;
2. Expenditures incurred during a specified
3. period; and
4. Assets transferred during the specified period.

Who can Appeal?

The person to whom the assessment, amended assessment and other order is addressed has
the right of appeal.
How to lodge an appeal?
If a taxpayer disagrees with an assessment, an amended assessment or any other order, in part
or in full, under any one of the situations we have listed herein above under “circumstances
giving rise to appeals” or the taxpayer believes that such assessment, amended assessment or
the order is wrong otherwise, can lodge an appeal before the Commissioner (Appeals):
 On the prescribed form of memorandum and grounds of appeal;
 Stating the grounds of appeal and claim / pray;
 Payment of prescribed fee; and
 Lodged within the time limit allowed for this purpose.
What is difference between VAT and Sales Tax?
VAT is levied on goods and services while sales tax is imposed generally on goods. Contrary to
sales tax VAT has no cascading effect. VAT is a multistage tax, levied only on the value added at
each stage in the chain of supply of goods and services with the provision of a set-off for the tax
paid at earlier stages in the chain. Thus, VAT eventually becomes a single point tax.
What will be scope of VAT?
VAT will cover supply (including import) of both goods and services at uniform rate of 15
percent unless exempted under the VAT law. The businesses whose annual turnover is less than
Rs.7.5 million will be out of VAT net.
What Products / Services are subject to Sales Tax in Pakistan?
Sales Tax in Pakistan is levied at various stages of economic activity at the rate of 0 up to 21 per
cent by the government of Pakistan on the following items: all goods imported into Pakistan,
payable by the importers; all supplies made in Pakistan by a registered person in the course of
furtherance of any business carried on by him; all services in Pakistan.

Section-VIII
Imports, Exports and International Trading Matters:
What is Trade?
Trade refers to buying and selling of goods and services for money or money’s worth. It involves
transfer or exchange of goods and services for money or money’s worth. The manufacturers or
producer produces the goods, then moves on to the wholesaler, then to retailer and finally to
the ultimate consumer.
What is a current Trade Policy?
Ministry of Commerce announced a 3-year Trade Policy in 2009-10, which is available for
perusal on the website of Ministry of Commerce.
What is the procedure for export and import registration?
Registration for importer / exporter is no longer required.
What facilities/incentives are provided to an exporter?
In order to improve and enhance exports from Pakistan, the exporters have been provided
numerous incentives as well facilities. The objective of these facilities/incentives is to make the
exports Zero-rated, which means that the exporter does not pay any tax on the sales abroad.
Major facilities/incentives available to exporters at present are:
Export financing at below market mark-up under the Export Finance Scheme of the State Bank
of Pakistan.
 Export financing under Foreign Currency Export Finance facility (FCEF/$. Window) for
purchase of Inputs domestically or for imports of foreign inputs for exportable goods.
 Income Tax @ 0.75% to 1.25% for different commodities under the income tax
ordinance 1979.
 Facilities under temporary importation Scheme.
 Facilities under common bonded warehouse Scheme.
 Facilities under the Pioneering Export Marketing & Product Upgradation fund (PEMPUF)
(Facility is in development phase )
 Duty Drawback Scheme.
 Export House Scheme.
 Payment of commission to agents abroad.
 Opening of offices abroad.
 Protocol Passes to leading exporter for access to lounges at National Airport etc.

What procedure is required for export trade?

Following are some important factors, in connection with the export procedure.
 Selection of a product
 Opening of an Office
 Registration for export
 Selection of market
 Quoting a price
 Signing of a contract
 Terms of delivery
 Terms of payment
 Financing for export
 Packing
 Transport and
 Insurance etc.

What are the documents required for export trade?

The Following documents are normally used in exports:
 E –Form (Through authorized Commercial Bank)
 Shipping Bill (Through authorized clearing agents)
 B/L or AWB (Through clearing agents)
  Commercial Invoice
 Packing list
 Certificate Country of Origin (Through Chamber) or 6 (a) GSP (Through EPB)
 Export Contract registration.

How can I market my exportable products in the international market?

He has to develop his own strategy to match his products with the local needs and preferences
of consumers. There is a slim chance that his product will fit the target market without some
modification. He may have to change the size, color, specification, etc. in order to meet the
consumer’s preferences and the rules and regulations concerning the distribution of the
product. Therefore it is helpful for the exporter to know the following points regarding his
target market before he commences his export business:
 Local production figures.
 Export by destination & Import by Country of origin.
 Market size in terms of value and quantity.
 Profile of local major manufacturers.
 Distribution channel and mark-up at each of the distribution channel.
 Competition among local products and imported brands. Evaluation of products by
consumers. Retailers, wholesalers and importers in terms of price, quality and design.
 Import system and related rules including special certification and necessary
documentation. It is advisable for the exporter to be aware of his responsibilities
concerning import rules well in advance.
 Local rules and regulation related to the marketing of the intended product for sale. It
would benefit the exporter if he knew earlier if the time consuming and elaborate
modification, testing and labeling of his product to meet local rules and regulations are
necessary.

Section-IX
No Objection Certificates (NOCs) for projects to be implemented in KP and
FATA:
What is an NOC?
‘No Objection Certificate’ issued by the government is a document to prove that a
program/project is authorized and supported by the government. It is a legal requirement that
implementers have an NOC before initiating work.The NOC certificate is also a document of
‘proof of authorisation’ which can be shown to local authorities during implementation.
Why do we need NOC?
The process of application ensures that adequate coordination with the government, and
humanitarian clusters, has taken place to ensure an appropriate response, to a clear need,
according to accepted standards, by a credible organization without duplication has been
undertaken. The certificate itself proves that coordination is complete. Finally, NOCs
registration allows for maintenance of a ‘who is doing what and where data-base on which
monitoring can be based
Which kind of program/projects need an it?
All relief, humanitarian and early recovery programs/projects in Khyber Paktunkhwa (KP) and
the Federally Administered Tribal Areas (FATA). This includes projects in existing PHRP, and ERF
projects.
(NB authorization of development projects is done through PND departments of KP and FATA
and PaRRSA, not the P/FDMA NOC process)
Who has to apply for it?
The ‘Owner’ of the project alone needs to apply for an NOC.
Is a separate NOC necessary for each program/project?
Yes every separate program/project needs a separate NOC.
Who is the owner?
The owner is the agency (National/international NGO or UN) that has requested funds from a
donor and which is answerable to the donor for how the funds are spent. The owner may
implement directly using their own staff or may organize and manage implementation through
an Implementing Partner (IP)
Does an Implementing Partner (IP) need a separate NOC?
No. Each program/project needs only one NOC. However, each individual IP will be specifically
named on the NOC. Each IP will be given a copy of the NOC by the owner.
Can an agency be both an ‘Owner’ and an ‘IP’?
Not in the same program/project however the same organsation can be an ‘Owner’ in one
project and an ‘IP’ in another separate program/project authorized by a separate NOC.
Who does the ‘owner’ apply to?
PDMA for programs/project to be implemented in Khyber Patunkhwa and FDMAfor
programs/project to be implemented in FATA.
How many NOCs does a project/program need?
One- from P/FDMA to the program/project ‘owner’.
How are the line departments involved/consulted and what authority do they have?
Line department will each have a specific focal point for the cluster. They are informed of the
project/program NOC application as a part of the cluster vetting process. Line departments are
co-chairs of clusters and in regular contact with their counterpart co-lead. To ensure that line
departments agree with the issuance of an NOC they are also officially informed by the co-lead
when vetting is completed and recommendations forwarded t o P/FDMA. The Line Department
is then invited to provide feedback to both the co-lead and P/FDMA within 5 working days, if
they have any concern. Thus Line Department consultation is an integral part of the NOC
process and an NOC officially affirms their approval. If they do not register any objection the 5
days their agreement will be assumed.
(NB. P/FDMA will begin to process the application immediately after receiving a cluster
recommendation but will not issue the NOC until either the line department has given positive
feedback or 5 days have elapsed – whichever comes first.)
How are the line District Coordination Offices and Political Agents involved/consulted and
what authority do they have?
Neither the DCO or PA have the authority to issue or revoke an NOC, It is essential however,
that the ‘owner’ and/or IP coordinate closely with the DCO and other district level coordination
bodies to ensure smooth and well facilitated implementation.
How are the military involved/consulted and what authority do they have?
The Military do not issue a separate NOC. In D I Khan, Tank and all of FATA the military have to
give approval of the program/project and the IPs before P/FDMA can issue an NOC. In addition
military on the ground may request to see a copy of the NOC.
Will this project implementation NOC, automatically allows the presence of an International
Staff to operate in the area of the project?
No. Travel of international staff requires a separate type of NOC in all areas, especially in FATA
where access is most strictly governed.
How is an application made?
By filling in the form available on P/FDMA website (NNNN), coordinating with the humanitarian
cluster to facilitate their vetting and providing the required supporting documents. (NB the
owner must provide all documents relevant to all IPs to be included in the NOC)The completed
application package’ may be sent electronically or hard copy to P/FDMA. (NB An on-line system
is being developed, once it is completed application will be made on-line but vetting processes
and the need for supporting documentation will remain the same.)
Why do clusters have to vet programs/projects?
To ensure that the program/project meets identified needs, has acceptable technical standards
and does not overlap or duplicate any other existing or pending work.
How long will the cluster vetting take?
Not more than 5 working days.
What does cluster vetting mean?
That the cluster lead has answered the following question:
 The ‘owner’ has coordinated with the cluster
 The technical components of the program/project are acceptable
 The program/project meets a known need
 The program/project is not duplicative.
and, if the answers are affirmative recommend the proposal for an NOC.

In addition the cluster lead will ensure that the relevant line-department is informed of the
proposal and has had an opportunity of 5 working days to comment.
What happens if the cluster lead is away?
It is the responsibility of the cluster lead UN agency to ensure that a cluster lead is designated
and available during all working hours
How long does it take to get an NOC?
In KP five working days, x working day in FATA, D I Khan and Tank (for discussion at PSM) after
submission of the cluster vetted application, including all supporting documents.
How do we know what the status of an application is?
By checking the P/FDMA tracking document on-line. It shows, application date, date final
supporting documents were submitted and the status of the application (pending, approved or
rejected) and the reason.
What happens if P/FDMA approves some but not all the IPs
An NOC is issued for the program/project and the approved IPs will be specifically named. At
that point implementation can begin with the ‘approved named’ IPs. Solutions will be sought by
the ‘owner’ and P/FDMA for the remaining IPs. Once approval for them, or replacement IPs, is
given, a new certificate naming all the finally approved IPs will be issued and implementation of
all components may begin.
What is the process for contesting a decision or complaints?
Either directly with the P/FDMA focal point or through the bi-weekly Operational Coordination
Meeting (OCM).
How long does an NOC last?
In KP other than D I Khan and Tank an NOC will last for six months. In FATA, D I Khan and Tank
an NOC lasts for 3 months.
What is the process for an extension application?
A letter of request, briefly explaining the reason for needing additional time and a
program/project progress report should be sent to P/FDMA.
How long does it take to get an extension?
Five working days as long as the progress report is comprehensive.
Can an NOC be revoked?
Yes if monitoring shows that implementation is not in line with the proposal and or mal-
practice is identified and not immediately resolved.
What are P/FDMA responsibilities after issuing an NOC?
To ensure that the military and all civilian authorities are aware of, respect the NOC and when
necessary support and facilitate implementation. To monitor implementation and advice the
owner as necessary
What are ‘owner’ responsibilities after receiving an NOC?
To coordinate as necessary with line departments and humanitarian coordination groups as
necessary. To monitor implementation, ensure adequate reporting and adjust program/project
as necessary.
What are IP’ responsibilities after receiving an NOC?
To coordinate at the local level with DCOs, line departments and relevant coordination groups.
To implement in accordance to the proposed work-plan and report regularly using an agreed
system.
Who will provide support if there are problems regarding authorization during
implementation, including from line departments, PAs, DCOs and/or the military?
P/FDMA and/or OCHA