SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN

PROMOTERS’ GUIDE

FORMATION AND INCORPORATION OF COMPANIES

UNDER THE COMPANIES ORDINANCE 1984

N.I.C BUILDING, JINNAH AVENUE,

ISLAMABAD - PAKISTAN
Ph: 051-9207091- 4 Fax: 051-9204915
Website: www.secp.gov.pk
E-mail:enquiries@secp.gov.pk

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 SECURITIES AND EXCHANGE

COMMISSION OF PAKISTAN (SECP)

Organization

Securities and Exchange Commission of Pakistan (SECP) established under the

Securities and Exchange Commission of Pakistan Act 1997 was operationalized as a
body Corporate on 1st January 1999. SECP replaced Corporate Law Authority, the
former corporate regulatory body. It has been vested with adequate operational,
administrative and financial autonomy.

The SECP’s head office is at the Federal Capital, Islamabad and it has eight regional
offices (Company Registration Offices), one at Federal Capital, four at provincial
capitals and three in other major cities i.e. Multan, Faisalabad and Sukkur. The SECP
has been organized into following Divisions:

• Company Law Division;

• Securities Market Division;
• Specialized Companies Division;
• Finance & Admin Division;
• HR& Training Division;
• Insurance Division;
• Information System & Technology Division.

Functions

SECP’s main functions include; regulation of securities market and related

institutions like Central Depository Company (CDC), Credit Rating Companies and
Modarabas (funds operating on the basis of Islamic economic principles);
administration of the company law; regulation of non-banking finance companies like
leasing companies, investment banks and mutual funds, regulation of insurance
business and private pensions.

One of the important functions of the SECP is the incorporation/registration

of companies. This task has been entrusted to the Registration Department,
Company Law Division which has its field offices known as Company
Registration Offices (CROs) for the purpose of incorporation / registration
of different type of companies.

Since the inception of SECP, a number of operational changes have been introduced
and a friendly environment has been created at the CROs. Incorporation of
companies has been made much easier, smooth and swift ensuring completion of
this process within three days. Other public services like availability of name,
providing of certified copies etc., are rendered within one day. eServices has been
launched by the SECP in Sep. 2008, which facilitates online availability of name,
online incorporation of companies and e-filing of statutory returns. It enables the
promoters and management of the company to interact online using the eServices
portal, without visiting the SECP offices. Online services save time and resources,
increase efficiency, create a paperless environment, promote confidence and
strengthen the country’s economy.

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INCORPORATION OF A COMPANY

For the convenience of general public, promoters and directors of companies, SECP
has established its eight CROs at Islamabad, Karachi, Lahore, Peshawar, Faisalabad,
Multan, Sukkur and Quetta. Online facilities for incorporation of companies and filing
of returns have been made available. registration of companies and monitoring of
their working according to law, functions of CRO’s include providing services and
guidance and also to ensure that the companies and their directors comply with the
statutory requirements as provided under the Companies Ordinance, 1984 (the
Ordinance). The record of companies maintained by the CROs is public record and
the investors, shareholders, creditors and general public, may inspect the record of
any company whenever they need and they may also obtain certified copy of any
specific document on payment of nominal amount of fee.

Any three or more persons associated for lawful purpose may, by subscribing their
names to the Memorandum of Association and complying with the requirements of
the Ordinance form a public company and any one or more persons so associated
may, in like manner, form a private company. If only one member forms a private
company, it is called a single member company and if it is formed by more than one
member, it is termed as a private company.

Prior approval of the Ministries/Departments etc. noted against each category of the
following companies is required to be obtained before incorporation of companies: -

I) Ministry of Finance
(a) A banking company
II) State Bank of Pakistan
(b) A non-banking finance Securities and Exchange
company (NBFC) Commission of Pakistan
(c) A security service
Interior Division
providing company
Stock Exchange (for transfer of
(d) A corporate brokerage
member ship card in favour of
house
proposed company)
(e) A money exchange
State Bank of Pakistan
company
(f) An Association not for
Licence from Securities and
profit u/s 42 of the
Exchange Commission of Pakistan
Companies Ordinance, 1984
(g) A trade organization u/s
42 of the Companies Licence from Ministry of Commerce
Ordinance, 1984

Following are the requirements for registration of a new company under the
Companies Ordinance, 1984:-

a. Availability of Name

The first step with regard to incorporation of a company is to

seek the availability of the proposed name for the company from
the registrar. For this purpose, an application is to be made and

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 Rs.200/- for online application andRs. 500/- for offline
application is required to be paid for seeking availability
certificate for each name. The promoters desirous of forming a
company should make sure that the name chosen is not
otherwise inappropriate, deceptive or designed to exploit or
offend the religious susceptibilities of the people and neither is
identical nor closely resembling with the name of an existing
company. To facilitate the promoters, a list of prohibited/
sensitive names has also been provided at the link:
https://www.secp.gov.pk/ns/pdf/Prohibited_words.pdf

b. Documents for registration of a limited company

The following documents are required to be filed with the

registrar concerned for registration of a private limited
company:-

I. Copy of national identity card or passport, in case

of foreigner, of each subscriber and witness to the
memorandum and article of association.

II. Memorandum and articles of association

Four printed copes of Memorandum and Articles of

Association in case of offline submission and one copy
for online submission, duly signed by each subscriber in
the presence of one witness.. In order to facilitate the
general public, the standardized specimen of
Memorandum of Association of various sectors have
been provided on the Commission’s Website.

III. Form - 1

Declaration of compliance with the pre-requisites for

formation of the company.

IV. Registration/filing fee

A copy of the original paid Challan in the any branch of

MCB Bank Limited or a Bank Draft/Pay Order drawn in
favour of the Securities and Exchange Commission of
Pakistan of the prescribed amount. (Table-I).

V. Authorization by sponsors

The authorization of sponsors in favour of a person to

make good the deficiencies, if any, in memorandum and
articles of association as may be pointed out by the
registrar concerned and to collect the certificate of
incorporation.

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c. Additional Requirements for Incorporation Of a Company
having objects of providing Security Services

In case of security object company nine additional sets of each of

the documents at i and ii above alongwith the bio-data, four
attested photographs of each subscribers and financial
position/bank statement of the subscribers (Aggregate wealth
should not be less than 1.5 million) is required to be provided.
Ministry of Interior grants NOC for a security object company.

d. Documents for incorporation of a Single Member Company

Any person may form a single member company and would file
with the registrar at the time of incorporation a nomination in the
form as set out in Form S1 indicating at least two individuals to
act as nominee director and alternate nominee director, of the
company in the event of his death. All the requirements for
incorporation of a private limited company shall mutatis mutandis
apply to a single member company.

e. Transfer of membership of Single Member Company to a

new member.

If the membership of a single member company is transferred to

a new member, the company shall, within fifteen days from such
transfer, also file with the registrar, a nomination in the form as
set out in Form S1.

f. Change in status of a single member company.- A single

member company can be converted into a private company on
increase of the number of its members to more than one. The
company shall pass a special resolution for change of status and
alter its articles accordingly within thirty days and transfer the
shares within seven days. The company shall appoint and elect
one or more additional directors within fifteen days of passing the
special resolution and notify the appointment on Form 29
prescribed under the Companies (General Provisions and Forms)
Rules, 1985 (the Rules) within fourteen days. Further, the
company is required to file a notice of the fact in writing in the
form as set out in Form S2, with the registrar within sixty days
from the date of passing of special resolution.

g. Company becoming a single member company.- A private

company having two or more members shall convert its status
into single member company by passing a special resolution for
change of its status, making necessary alteration in its articles
and obtaining the approval of the Commission. An application for
seeking Commission’s approval shall be submitted by the
company in the form as set out in Form S4 within thirty days of
passing the special resolution for change of status to single
member company.

The company shall transfer shares in the name of single member

within fifteen days of the approval of the Commission and notify

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 change in the board of directors on Form 29 within fourteen days
from date of transfer of shares.

A certified copy of the order containing the approval together

with a notice in the form as set out in Form S5 and a nomination
of nominee directors in the form as set out in Form S1 shall be
filed with the registrar concerned within fifteen days.

h. Obtaining Certified Copies of Memorandum & Articles of

Association and Certificate of Incorporation

In order to obtain certified copies of memorandum of Association,

articles of association and certificate of incorporation, challan of
the requisite copying fee and Court stamps fee of the requisite
value should be furnished alongwith registration documents.

i. Documents for incorporation of an association not for profit

All the documents meant for incorporation of a limited company

alongwith a licence issued by the SECP. In case of a trade body,
a licence issued by Ministry of Commerce would also be
submitted to the registrar concerned. The application for
obtaining the requisite licence from the Commission should be
accompanied by draft memorandum and Articles of Association,
list of promoters, bio-data of each promoter, declaration, names
of companies in which the promoters of the proposed association
hold any office, estimates of annual income and expenditure and
brief statement of work already done or to be done. (Section 42
& Rule 6). Detailed guidance is provided on the link:
http://www.secp.gov.pk/divisions/Portal_RD/registration_promot
ers.asp

REQUIREMENTS AFTER INCORPORATION

a. Private companies

i. The number and names of first directors are required to be

determined by the majority of subscribers of memorandum in
writing and until so determined all the subscribers of the
memorandum who are natural persons shall be deemed to be
directors of the company. The appointment of first directors is
required to be notified to the registrar concerned on Form '29'
within 14 days from the date of incorporation. The first election
of directors is required to be held at the first Annual General
Meeting of the company and subsequently after every three
years. The directors so elected are to hold office for a period of
three years. However, casual vacancy occurring on account of
death, resignation or removal of any director may be filled up
by the other directors for the remainder period of the term.

ii. Directors of every company are required to appoint the first

chief executive not later than fifteen days from the date of

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 incorporation and thereafter within fourteen days from the date

ember company or of the office of company secretary falling vacant and notify such appointment on Form 29 within fou

he registrar concerned on Form '29' within 14 days of the said election, appointment or change (Section 205).

m is normally submitted with the registration documents to facilitate communication. Change of register

incorporation and subsequent Annual General Meetings are required to be held once at least in every calendar year, with

accounts since the incorporation of the company and in any other case since the preceding account, made up to a date no

l Meeting, where no such meeting is held, on the last day of the calendar year (Section 156).

ccompanied by a circular issued under section

 held by them and, on the allotment of shares, return of
allotment on Form '3' is required to be filed with registrar
concerned within 30 days from the date of allotment of shares.
Partly paid shares are not allowed to be issued at all. (Sections
73 & 86).

xii. The company is required to issue share certificates to its

shareholders within 90 days from the date of allotment or
within 45 days after the date of filing of application for
registration of transfer of shares (Section 74).

xiii. Particulars of every mortgage or charge created by the

company on its property or undertaking and every modification
therein or satisfaction thereof are required to be filed and
registered with the registrar concerned within 21 days after the
date of its creation, modification or satisfaction (Sections 121,
129 & 132).

xiv. In case of death of single member of a Single Member

Company, the nominee director of SMC is required to inform
the registrar concerned of death of the single member, provide
particulars of the legal heirs and in case of any impediment
report the circumstances seeking the directions in the form as
set out in Form S3 within seven days of the death of the single
member.

xv. The decisions taken by the single member or sole director in

the meeting of director and member of a Single Member
Company are required to be drawn up in writing and recorded
in the minute’s book by the company secretary.

b. Public companies

i. All the requirements meant for private companies given at

serial Nos. (i) to (xiii) above are also applicable to public
companies. However, the listed companies are also required to
file list of members on floppy diskette to the Commission and
the associations are required to file with the registrar concerned
annual return on Form ‘B’ instead of Form ‘A’.

ii. Company is required to file a list of Directors and consent of

Directors and Chief Executive within 7 days of the incorporation
and thereafter before the election/appointment of Directors and
Chief Executive on Forms 27 & 28.

iii. Company shall be entitled to commence its business after

obtaining commencement of business certificate from the
registrar concerned (Section 146).

iv. Statutory meeting is required to be held within a period of not

less than three months but not more than six months from the
date at which the company is entitled to commence business. A
statutory report is required to be circulated to the members
and five copies thereof certified in the prescribed manner are

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 required to be filed with the registrar concerned, at least 21
days before the date of Statutory Meeting. A private company
which converts itself to public company after one year of
incorporation is not required to hold such statutory meeting and
issue such statutory report. (Section 157).

v. Two copies of the audited balance sheet and profit and loss
accounts signed in the prescribed manner are required to be
filed by public companies with the registrar concerned within 30
days from the date of their AGM (Sections 233 & 242).

vi. Every listed company is required to file three copies of audited

balance sheet and profit and loss accounts to the SECP, Stock
Exchange and the registrar at the time of sending the notice of
AGM to the members as well as within 30 days of holding the
Annual General Meeting.

vii. Return containing beneficial ownership of listed securities and

change therein on Form 31 and Form 32 are required to be filed
with the Registrar concerned and the SECP.

viii. A listed company is also required to appoint a company

secretary.

c. Requirement after establishment of place of business by foreign

companies

A Foreign Company incorporated outside Pakistan, is required to file

the following documents to the registrar concerned within 30 days
from the establishment of its place of business in Pakistan (Sections
450 to 458 of the Companies Ordinance, 1984):

i. A certified copy of the charter, statute or Memorandum and

Articles of the company accompanied by Form 38. The
certification is to be given by:-

(a) the public officer in the country where the company is

incorporated to whose custody the original is committed
or
(b) a notary public of the country where the company is
incorporated; or
(c) an affidavit of a responsible officer of the company in
the country where the company is incorporated.

The signature or seal of the person so certifying shall be

authenticated by a Pakistani diplomatic consular or consulate
officer.

If the document is not in English, duly certified translation in

English or Urdu language is provided (Rule 23 of Companies
(General Provisions and Forms) Rules, 1985.

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 ii. Address of registered office or principal office of the company,
on Form 39;

iii. Particulars of directors, Chief Executive and secretary (if any) of

the company, on Form 40;

iv. Particulars of principal officer of the company in Pakistan, on

Form 41;

v. Particulars of person(s) resident in Pakistan authorized to

accept service on behalf of the foreign company, on Form 42
alongwith the certified copy of the appointment order, authority
letter of board of directors’ resolution and consent of the
principle officer;

vi. Address of principal place of business in Pakistan of the foreign

company, on Form 43 (Section 451).

vii. Permission letter from the Board of Investment with a specific

validity period for opening and maintaining of a branch/liaison
office by a foreign company.

• Any change or alteration in particulars stated in the documents and

returns filed at the time of registration u/s 451 is required to be
filed on form 44 with the registrar concerned within 30 days of
such change or alteration (Section 452).
• Foreign company is required to file annually with the registrar
concerned annual accounts in respect of its operations within
Pakistan as well as its global accounts together with the list of
Pakistani members and debenture holders and of places of
business of the company in Pakistan within the prescribed period
(Section 453).
• Foreign company is required to submit the renewal/extension of
the permission to open/maintain a branch/liaison office from the
Board of Investment on the expiry of the validity period of the
permission, originally granted.
• Foreign company is required to give notice on form 46 to the
registrar concerned at least 30 days before it intends to cease to
have a place of business in Pakistan and to 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
situated

INFORMATION FOR THE COMPANIES HAVING FOREIGN INVESTMENT/

COLLABORATION

Foreign Investors are permitted to hold 100% equity of industrial projects

without any permission of the Government. No Government sanction is
required for setting up any industry, in terms of field of activity, location and
size except for the following:
A. Arms and ammunitions.
B. High explosives
C. Radio-active substances
D. Security printing, currency and mint.

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No new units for the manufacture of alcoholic beverages or liquors will be
allowed. There is no requirement for obtaining No Objection Certificates
(NOC) from the provincial governments for locating the project anywhere in
the country except in areas that are notified as negative areas. With the
announcement of Investment Policy, 1997 by Government of Pakistan, the
foreign investment has since been allowed on repatriate able basis in
agriculture, service, infrastructure and social sectors subject to conditions
indicated against each. They will have to simply register a company with the
SEC under the Ordinance and to inform the State Bank of Pakistan provided
the relevant conditionality is fulfilled.

(a) Service Sector:

Activities

"Foreign Direct Investment (FDI) in Service Sector is allowed for any

activity subject to any condition that services which require prior
permission/NOC or licence from the concerned agencies will continue
to get the same treatment until and unless de-regulated by such
agencies and will be subject to provisions of respective sectoral
policies. The list of deregulated services in telecommunications is as
under; -

a) E-mail/Internet/Electronic Information services (EIS)

b) Data Communication Network services

c) Trunk Radio services

d) Cellular Mobile telephone Services

e) Audiotex Services

f) Voice Mail Services

g) Card Pay Phone Services

h) Close User Group for Banking Operations

i) International Satellite Operations for Domestic Data

Communication

j) Paging Services

k) Vehicle Tracking System (VTS)

l) Burglar Alarm System (BAS)

m) Global Mobile Personal Communication System (GMPCS)

n) Any other telecommunication service, which is deregulated in

future, will become part of this list.

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Note: - Those sectors which have not been deregulated, and are with
Pakistan Telecommunication Corporation Limited (PTCL), are open to
foreign investors in collaboration with PTCL”

Conditions

i. The amount of foreign equity investment in the

company/project shall be at least US $ 0.3 million.

ii. Foreign investors are allowed to hold 100 % of the equity

subject to the condition that the repatriation of profit shall be
restricted to a maximum of 60 % of the total equity or profits
and that a minimum of 40 % of equity is held by Pakistani
investor (including sale of shares in stock exchange) within five
years.

(b) infrastructure sector:

Activities

"Infrastructure projects including development of industrial zones”

Conditions

i. The amount of foreign equity investment in the company/

project shall be at least US $ 0.3 million.

ii. 100% foreign equity is allowed on repatriate able basis.

(c) social sector:

Activities

"Education, Technical/Vocational Training, Human Resource

Development (HRD), Hospitals, Medical and Diagnostic Services."

Conditions

i. The amount of foreign equity investment in the

company/project shall be at least US $ 0.3 million.

ii. 100% foreign equity is allowed.

(d) Corporate Agriculture Farming (CAF) sector :

The Cabinet decision dated June 19th, 2002 on Corporate Agriculture

Farming (CAF) policy enunciates that such local and foreign companies
would be entitled CAF legal entity that are locally incorporated under
the Companies Ordinance, 1984. In this connection, in case of foreign
collaboration, 60% foreign equity is allowed with minimum investment
of US$ 0.3 million. Beside the following agriculture related activities
are included in CAF under the approved policy package, -

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 i. Land development/reclamation of batter land, desert and hilly
areas for agriculture purpose and Crop farming

ii Reclamation of water Front Areas/Creeks.

iii. Crops. Fruits, Vegetables, Flowers Farming/ Integrated

Agriculture (Cultivation and processing of Crops)

iv. Modernization and Development of Irrigation Facilities and

Water Management.

v. On farm construction of wheat/grain storage and construction

of cold storage for captive use (not on commercial basis)

(e) Others.-
i) Tourism: Tourism has been given the status of industry and
placed under priority industries i.e. category “C”of the
Investment Policy.
ii) Housing and Construction: The Housing and Construction
sector has also been declared as Industry and placed under
priority Industries i.e. category “C”of the Investment Policy.
iii) Local and Foreign Companies involved in real estate projects
will not market these projects unless the title of the property is
transferred in the name of a locally incorporated company and
the “Commencement of Business” certificate is issued by the
Securities and Exchange Commission of Pakistan (SECP) to the
company.
iv) Information Technology: Computer Software and
Information Technology (IT) have been declared as Industry.

Table - I
TABLE OF FEE
Availability of Name
Fees

Online submission Manual submission

(Rs.) (Rs.)
200 500

Registration Fees

Online submission Manual submission

(Rs.) (Rs.)
For registration of a company 2,500 5,000
whose
nominal share capital does not
exceed
100,
For 000 rupees , aoffeeaof company
registration -----
whose
nominal share capital exceeds
100, 000 rupees , the additional
fee to be determined according to
the amount of nominal share
capital as follows,
namely:-
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(i) For every 100,000
rupees of nominal share capital 50 1,0
or part of 100,000 rupees, after 0 00
the first 100,000 rupees, up to
5,000,000 rupees, a fee of…….

(ii) For every 100,000

rupees of nominal share capital
or part of 100,000 rupees, after 25 50
the first 5,000,000 rupees, upto
0 0
5,000,000,000 a fee of……..

(iii) For every 100,000

rupees of nominal share capital
or part of 100,000 rupees, after
the first 5,000,000,000 rupees,
10 20
upto any amount a fee of……..
0 0

Registration Fees for foreign companies

Online submission Manual submission

(Rs.) (Rs.)
25,000 50,000

Registration Fees for Associations not for Profit under Section 42

Online submission Manual submission

(Rs.) (Rs.)
Licence or its renewal 5,000 10,000
Registration 25,000 50,000

Other Fees:
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 Online submission Manual submission
(Rs.) (Rs.)
Filing fee per return 500 1,000
Registration/ satisfaction of 5,000 7,500
mortgage/charge fee
Inspection fee of file of a company 200 500
Application/Appeal/Complaint
fee: 500 500
ƒ By a member
500 1000
ƒ By a creditor 500 1000
ƒ On behalf of a company
Change of name fee 1,000 2,000
Alteration in Memorandum fee 5,000 10,000
Extension in time period for holding For private Cos. 5,000 For private Cos. 5,000
of For Other Cos. 15,000 For Other Cos. 15,000
AGM
Certified copy
fee:
100 200
ƒ Any certificate For private Cos. 250 For private Cos. 500
ƒ Memorandum and Articles For Other Cos. 500 For Other Cos. 1,000
of For private Cos. 100 For private Cos. 200
Associatio For Other Cos. 200 For Other Cos. 300
n Minimum Minimum
ƒ Any return 100 or 20 100 or 20
per page per page
ƒ Any other document

For an application to the

Commission seeking approval to
issue, circulate and publish the
prospectus, a non-
refundable fee in the following
manner according to the size of --- 25,000
total issue including all types of --- 50,000
securities:

Up to Rs.250 --- 100,000

million
More than Rs. 250 million and
up to d Rs. 2 per data Rs. 2 per data field
Rs. 1000 field
million d
More than Rs. 1000
million
200
200
(a) For providing list of companies,
a fe calculated at the rate per
data fiel subject to a minimum fee
of five hundre rupees, a fee of ….
Abbreviations/References:

ƒ CR0: Company Registration Office

ƒ SECP: Securities & Exchange Commission of Pakistan

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ƒ Forms: Different Specimen Forms available at the SEC HQ, CROs and SECP
Website.
ƒ Rules: Companies General Provisions & Forms Rules
ƒ Sections: Sections of the Companies Ordinance, 1984

Fee can be paid through Bank draft,

Pay Order or Challan in all branches of MCB Bank Limited

Location and contact details of Company Registration Offices

1. Company Registration Office,

State Life Building, 7-Blue Area, Islamabad
Phone: 051-9208740, Fax
051-9208740 email:
croislamabad@secp.gov.pk

2. Company Registration Office,

4th Floor, SLIC Building No.2, Karachi.
Phone: 021-99213272, Fax
021-99213278 email:
crokarachi@secp.gov.pk

3. Company Registration
Office,
3rd & 4th Floors, Associated House,
7-Egerton Road, Lahore.
Phone: 042- 9200274, Fax
042-9202044 email:
crolahore@secp.gov.pk

4. Company Registration Office,

63-A, Nawa-i-Waqt Building, Abdali Road, Multan.
Phone: 061-9200530 Fax
061-9200530 email:
cromultan@secp.gov.pk

5. Company Registration
Office,
356-A, Al-Jamil PIaza,
1st Floor, Peoples Colony, Small D Ground,
Faisalabad. Phone: 041-9220284 Fax:
9220284
email: crofsb@secp.gov.pk

6. Company Registration Office,

1st Floor, State Life Building,
The Mall, Peshawar Cantt.
Phone: 091-9213178, Fax
091-9213178 email:
cropeshawar@secp.gov.pk

7. Company Registration Office,

382/3, (IDBP House), Shahrah-e-Hali, Quetta Cantt.
Ph: 081-2844136
email: croqta@qta.paknet.com.pk
8. Company Registration Office,
House # 28, Hamdard Housing Society,

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Airport Road,
Sukkur. Ph: 071-
5630517
email : croskr@hotmail.com

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