Wasim Law Services
Single Member Company
What is a Single Member Company (SMC)?
A Single Member Company (SMC) is a type of private limited company registered with the Securities and Exchange Commission of Pakistan (SECP) that allows only one shareholder or owner. Introduced under the Companies Act, 2017, this structure is ideal for individuals who want the benefits of a private limited company—such as limited liability, corporate identity, and tax advantages—without requiring multiple shareholders. Unlike a sole proprietorship, an SMC is a separate legal entity, which means it can own assets, sue or be sued, and continue to exist beyond the life of its owner.
Who Should Register an SMC in Pakistan?
Single Member Company registration is suitable for: Freelancers and consultants (IT, legal, marketing) E-commerce sellers and Amazon/Shopify business owners Startup founders who want a formal legal structure Importers/exporters and traders Professionals like doctors, engineers, architects, etc. Individuals wanting full ownership with limited liability
Documents Required for SMC Registration in Pakistan
To register your SMC with SECP, you need the following documents: CNIC copy of the single member (owner) CNIC of nominee (required by law) Business address and utility bill Signed Memorandum of Association (MoA) Articles of Association (AoA) Proof of paid-up capital (usually PKR 100,000) Digital signature and NTN registration (post-registration)
Post-Registration Compliance for SMCs
Annual Returns: Submit yearly filings with SECP Maintain Financial Records: Proper bookkeeping and record-keeping is essential File Income Tax Returns: File returns with FBR and pay corporate tax Renew Digital Signature: For submitting forms on SECP’s portal Update Records: Inform SECP of any change in business address, nominee, or ownership
Why Use Professional Services for SMC Registration?
While you can register on your own, using a professional service ensures: Accurate and error-free documentation Fast processing of name and incorporation Compliance with SECP and FBR requirements Legal advice on tax planning and company structure
Benefits of Single Member Company Registration
✅ 1. Limited Liability As the owner, your personal assets are protected from business liabilities. You are only liable to the extent of your investment in the company. ✅ 2. 100% Ownership & Control No need to bring in partners or shareholders. You make all business decisions and own 100% of the company. ✅ 3. Legal & Professional Image SMCs enjoy a credible reputation in the market. Clients, vendors, and financial institutions trust registered companies more than unregistered businesses. ✅ 4. Tax Efficiency You can access corporate tax deductions, expense claims, and depreciation benefits not available to sole proprietors. ✅ 5. Perpetual Succession Your company can continue to operate even if you pass away or are unable to run it, thanks to the nominee director system.
Step-by-Step Process of SMC Registration
Step 1: Name Reservation Visit the SECP e-Services portal and submit a name reservation application. Your name must be unique and end with “(SMC-Private) Limited”. Step 2: Prepare Legal Documents Draft the MoA and AoA outlining your business objectives and structure. Include a nominee director, which is mandatory for SMCs. Step 3: Submit Incorporation Documents Fill out the incorporation forms online and upload all necessary documents. Pay the registration fee (approximately PKR 3,000–5,000 depending on capital). Step 4: Obtain Certificate of Incorporation Once your documents are approved, SECP will issue the Certificate of Incorporation and Company Registration Number (CRN). Step 5: Register with FBR Apply for an NTN (National Tax Number) with the Federal Board of Revenue (FBR) to operate legally and file taxes.
Can I convert a sole proprietorship into an SMC?
Yes. You can form a new SMC and transfer assets, clients, and tax registration accordingly.
What is the minimum capital for SMC registration?
There is no official minimum, but PKR 100,000 is commonly used.
