Please contact Josh and Mak International for advice on which type of NGO / NPO best suits your needs.This article is meant for general guidance only.
Below are some of the most Frequently Asked Questions (FAQs) on registration of a non-profit company in Pakistan which is an alternative to registering a non-profit under the Societies Act:
Does a non-profit company/organization need to obtain a licence?
Yes. Any such company/organization is required to obtain a 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.
For how many years is the licence valid?
The licence is issued for a period of five years and is renewable for further terms of five years each.
What is the minimum number of members needed to form an not-for-profit association under the Companies Ordinance, 1984?
A minimum of three members can form an association/company that is not for profit, and that association must be registered as a company with limited liability, without the addition of the words “Limited”, “(Private) Limited” or “(Guarantee) Limited”.
Can a non-profit company incorporated under Companies Ordinance, 1984 have multiple objectives?
Yes, non-profit company is allowed to have multiple objectives.
In the case of closing the non-profit company where will the assets or property of the said company go?
In the case of winding up or dissolution of the company, any surplus assets or property, following the satisfaction of all debts and liabilities, are to be given or transferred to some other company established under section 42 of the Companies Ordinance, 1984. These companies must have similar or identical objects.
Are foreigners 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 a licence granted under section 42 of the Companies Ordinance, 1984 be revoked?
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 company name and that company will cease to enjoy the exemption granted under section 42 of the Companies Ordinance, 1984. Before the licence is revoked the Securities & Exchange Commission of Pakistan shall give notice in writing of its intention and an opportunity will be given for the argument to be heard in opposition to the revocation.
Is a non-profit company wanting to register under section 42 of the Companies Ordinance, 1984 required to have a minimum paid up capital as required by other companies 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.
Can a non-profit company registered under section 42 of the Companies Laws of Pakistan have activities outside of the country?
Companies Ordinance, 1984 do not prohibit activities outside Pakistan.
Can one person be the sole director and officer of a non-profit company in Pakistan?
No. The Companies Ordinance, 1984 under which non-profit companies are incorporated requires a non-profit company to have at least three trustees.
Can a non-profit company pay a salary to its directors, officers and employees?
A non-profit company may pay reasonable compensation for services rendered to the employees of the company but the trustees cannot draw any salary or remuneration.
Is a non-profit 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 non-profit company is not automatically exempt from income tax or other taxes. To become exempt the association must meet certain requirements and apply to the Commissioner of Income Tax for exemption.
Josh and Mak International have successfully dealt with the incorporation of numerous non-profit companies under section 42 of the Company Ordinance, 1984 including registration of non-profit company for education; non-profit company for sports; non-profit company for charity activities; non-profit company for arts, sciences and literature; non-profit company for culture and heritage activities; non-profit company for health services activities; non-profit company for social infrastructure and human resource development activities; non-profit company for rural support programme activities; non-profit company for religious activities; non-profit company for professional Institutions activities; and non-profit company for special education activities.
Josh and Mak International can advise you on registration of a NGO / NPO and other related matters for individuals, firms and companies which are both local and foreign. You can contact Josh and Mak International for detailed consultancy and advice at 0300-5075993