A Public Limited Company (PLC) is a business entity that allows public investment by offering shares to the general public. It is the most suitable structure for large-scale businesses looking to raise capital through public offerings. The Securities and Exchange Commission of Pakistan (SECP) governs the incorporation and compliance of Public Limited Companies under the Companies Act, 2017.

Benefits of a Public Limited Company

1. Access to Public Capital – PLCs can raise significant capital by issuing shares to the public.
2. Limited Liability – Shareholders are only liable up to the amount they invest.
3. Enhanced Credibility – Public companies gain more trust from investors, clients, and financial institutions.
4. Liquidity & Transferability – Shares of a PLC can be freely traded on the Pakistan Stock Exchange (PSX).
5. Perpetual Succession – The company continues to exist regardless of changes in ownership.

Requirements for Registering a Public Limited Company

1. Minimum Requirements:

• At least three (3) directors.
• A minimum of seven (7) shareholders.
• Minimum paid-up capital as prescribed by SECP.

2. Step-by-Step Registration Process

Step 1: Name Reservation

• Apply for name approval through the SECP’s eServices Portal.
• The name should not be identical or similar to an existing company.

Step 2: Drafting of Legal Documents

• Memorandum of Association (MOA) – Defines the company’s objectives and operations.
• Articles of Association (AOA) – Outlines the internal governance of the company.

Step 3: Submission of Incorporation Documents

• File the following documents with SECP:
  • Incorporation Application (Form 1)
  • MOA & AOA
  • Director Details (Form 29)
  • Notice of Registered Office (Form 21)
  • Paid-up Capital Evidence
  • Copies of CNICs of Directors & Shareholders

Step 4: Issuance of Certificate of Incorporation

• SECP reviews the documents and, if approved, issues the Certificate of Incorporation.

Step 5: Obtaining NTN & Sales Tax Registration

• Apply for a National Tax Number (NTN) from FBR.
• If applicable, register for Sales Tax with FBR and Provincial Revenue Authorities.

Step 6: Listing on Pakistan Stock Exchange (Optional)

• If the PLC intends to go public, it must comply with the listing regulations of PSX and get approval from SECP.

Taxation and Compliance for Public Limited Companies

• Corporate Tax Rate: PLCs in Pakistan are subject to corporate income tax (currently around 29%).
• Annual Financial Audits: PLCs must have audited financial statements prepared by SECP-approved auditors.
• Annual Returns & Filings: Required to submit annual returns, financial reports, and tax filings to SECP & FBR.
• Compliance with PSX Regulations: If the company is listed, it must follow stock exchange regulations.

Challenges of a Public Limited Company

1. Strict Regulatory Compliance – PLCs must comply with extensive legal and financial regulations.
2. High Costs – Incorporation, legal documentation, and stock exchange listing involve significant costs.
3. Ownership Dilution – Public investment may reduce control of original owners.
4. Financial Disclosure – PLCs must disclose financial information to the public, ensuring transparency but reducing confidentiality.

Conclusion

A Public Limited Company (PLC) is ideal for businesses seeking growth through public investment. While it offers numerous advantages such as access to capital and credibility, it also comes with increased regulatory requirements. To successfully establish and manage a PLC, it is essential to comply with SECP, FBR, and PSX regulations.

ASCO Tax Consultants specializes in assisting businesses with company registration, tax compliance, and regulatory matters. If you need professional guidance in registering a Public Limited Company, contact us today!