Minimum Paid-Up Capital & Shareholder Rules for SECP Incorporation
An exhaustive capital structuring blueprint for business owners, SaaS founders, and corporate directors detailing SECP Authorized Capital rules, Paid-Up Capital bank deposit mandates, Form 22 auditor certificates, and share value allocations under the Companies Act 2017.
The maximum share capital headroom registered in Clause V of your Memorandum (Default: PKR 100,000 divided into 10,000 shares of PKR 10 each). Determines initial SECP incorporation fee.
Actual cash money deposited into the corporate bank account within 30 days of incorporation. Must be verified by a Chartered Accountant via SECP Form 22 within 45 days.
Table of Contents
- 1. Fundamental Capital Concepts under Companies Act 2017
- 2. SECP Statutory Minimum Capital Rules for Startups
- 3. The 30-Day Capital Deposit Mandate & Banking Protocol
- 4. SECP Form 22 & Chartered Accountant Verification
- 5. How to Increase Authorized Capital via Form 7
- 6. Share Allotments & Provincial Stamp Duty Rules
- 7. Frequently Asked Questions
1. Fundamental Capital Concepts under Companies Act 2017
When incorporating a Private Limited company or Single Member Company (SMC-Pvt Ltd) with the Securities and Exchange Commission of Pakistan (SECP), understanding share capital definitions under Section 85 of the Companies Act 2017 is essential:
The maximum financial limit of share capital a company is legally authorized to issue to shareholders, as specified in Clause V of its Memorandum of Association. SECP government incorporation fees are calculated based on this figure.
The portion of Authorized Capital that the founding subscribers formally pledge to purchase upon signing the company incorporation documents.
The actual liquid cash money transferred by subscribers from their personal bank accounts into the newly opened corporate bank account to pay for their allotted shares.
2. SECP Statutory Minimum Capital Rules for Startups
Under the repealed Companies Ordinance 1984, companies faced rigid minimum paid-up capital floors. To foster entrepreneurship, SECP completely abolished minimum capital requirements for general private limited entities under the Companies Act 2017.
Today, a tech startup, software house, digital marketing agency, or consulting firm can legally incorporate with an initial Authorized Capital of PKR 100,000 (10,000 ordinary shares valued at PKR 10 per share).
Special licensed business sectors retain mandatory statutory minimum capital floors enforced by specialized regulators:
• Non-Banking Finance Companies (NBFC): PKR 20 Million to PKR 100 Million+
• Security Guard Agencies: PKR 15 Million
• Insurance Companies: PKR 300 Million+
SECP CAPITAL STRUCTURING & FORM 22 SERVICES
Structure Your SECP Share Capital with ADVAQ
ADVAQ assists Pakistani founders with share capital allocations, Form 22 Chartered Accountant verifications, and Form 7 capital expansion filings.
3. The 30-Day Capital Deposit Mandate & Banking Protocol
Under Section 85(1) of the Companies Act 2017, subscribers who pledge share capital during incorporation are under a strict legal obligation to pay for their shares:
- 30-Day Mandatory Deposit Deadline: Within 30 days from the date of receiving the official SECP Certificate of Incorporation, every subscriber must deposit their subscribed share capital amount in cash or online bank transfer into the company's newly opened corporate bank account.
- Individual Bank Transfer Verification: Deposits must originate from the personal bank account of each respective subscriber matching their registered CNIC/NICOP. Cash deposits must bear the subscriber's name on the bank deposit slip.
4. SECP Form 22 & Chartered Accountant Verification
Depositing money into the bank account is not enough to satisfy SECP requirements. The company must report the capital deposit to SECP via Form 22:
Form 22 Statutory Filing Requirements:
• Filing Deadline: Must be submitted on SECP eServices within 45 days of incorporation.
• Auditor Certificate: Must be accompanied by a formal certificate issued by a practicing Chartered Accountant (CA) or Cost and Management Accountant (CMA) confirming inspection of the company's bank statement.
• Non-Compliance Penalties: Failure to file Form 22 within 45 days triggers automatic late filing fines and prevents the company from filing subsequent annual returns (Form A).
Frequently Asked Questions
SECP CAPITAL COMPLIANCE SOLUTIONS
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Authorized capital structuring, Form 22 auditor verification certificates, Form 7 capital increases, and share transfer compliance.