How to Start a New Business in Pakistan

  • 1

Visit the Securities and Exchange Commission of Pakistan’s (SECP) website (see Resources) to file your company name online. Make sure the name does not exist already by searching for your desired company name.

  • 2

Pay the name and registration fees on the SECP website through your bank account.

  • 3

Register your company through the Registrar of Companies under the eServices section of the SECP website. You will need to refer to information from your company incorporation forms, national identity card, memorandum and articles of association.

  • 4

Obtain digital signature and proof of registration. The digital signature and proof of registration will come through the SECP website from the National Institutional Facilitation Technologies (NIFT) two days after you register your company (given that you follow all the registration guidelines properly on the SECP website and have the proper documents).

  • 5

Register for income tax with your national tax number (NTN) on the SECP website. Apply for an NTN by providing proof of registration, your memorandum, articles of association and bank account number. You will also need the NTN of your directors and an attestation of your registered business address.

  • 6

Register for sales tax. Once you have registered for income tax, you can obtain a PIN code, a unique identifier number and a secure password by visiting the Federal Board of Revenue’s website (see Resources).

  • 7

Register for the Pakistani Professional Tax with your local tax authority. Find out where your local tax authority is located and then visit the office. There you will have to meet the District Excise & Taxation Officer to request to enroll your business as an “assessee.”

  • 8

Register with the Employee Social Security Institution (ESSI). Visit the ESSI main office in Karachi to meet the registrar for new companies. Bring your memorandum, articles of association and company incorporation documents.

  • 9

Register for old age benefits with the Pakistani Employees Old-Age Benefits Institution (EOBI). You can visit the EOBI website (see Resources for link) to download registration forms and find the e-mail address of your regional office to send them to.

  • 10

Register with the Pakistan Shops and Establishment Ordinance. Find out where your local Deputy Chief Inspector’s office is. Visit the office to register. You will have to pay a registration fee.

Top 10 Questions Every Business Plan Should Answer

Starting and building your own business can be overwhelming.  And while many business owners cringe at the mere mention of drafting a business plan, it is a great exercise to get your business back on track and to plan for future growth. More specifically, it forces you to map out where you are now, where you need to go and most importantly how you plan to get there.  If you are a first time business owner, or have never written a business plan, you may not know where to start. Our friends at Corporate Tax Network have helped thousands of business owners meet their goals through financial and business planning strategies. Below is their list of the Top 10 Questions EveryBusiness Plan Should Answer.


1) What is the need that your business exists to satisfy?

  • Every business exists because of some noticeable opportunity that you have discovered within the market. So you must clearly define the need and/or problem you are solving with this business.

2) How will your business satisfy the need?

  • Introduce and describe the business itself. Consider including a mission or vision statement with objectives detailing how the business satisfies the need in the market.

3) How does your company differentiate itself?

  • Describe your business model and competitive advantage. This will help you to outline how the business will sustain its position within the market.

4) Who will be the key players in the business?

  • Name the management team, board and advisers to the business. Highlight their expertise and experiences.

5) How big is the market you are entering?

  • Only after understanding the industry you are entering – its size, attractiveness and profit potential – can you truly justify the opportunity.

6) Who will you be targeting as customers?

  • Narrowing down your target customer will help enhance and define your marketing strategy.

7) What will be your most effective marketing and promotional strategies?

  • Once you’ve identified your target client, you’ll need to develop and implement a strategy on how best to reach them (e.g. PPC, television, radio, social, etc). And this in large part will be influenced by where your target client consumes information.

8) What are the economics of your business?

  • Define your revenue streams including pricing structure, costs, margins and expenses.

9) How much money is required to get your business started and generating revenue?

  • Identify needed capital requirements by determining where your business stands today, and what is needed in order to move forward.  Also, if you are in need of outside funding, what will be the sources and uses of funds requested.

10) What needs to happen to break-even?

  • Play around with financial projections and forecasts to determine the volume of sales needed to cover your expenses and to become profitable.  Include monthly breakdowns for the first two years.

Whether your objective is to find an investor, get a business loan or just improve the way you run your business, your business plan must answer these key questions.  Remember, there is no right or wrong answer, but addressing these questions will help you build a road map for your business.  And, of course, the better the map, the greater the likelihood that you’ll reach your destination!

For more information on financial strategies, contact our partners at Corporate Tax Network today. They have a team of business consultants and tax advisers standing by to help you. You can also follow them on Twitter for daily business information.

Does Your Business Plan Answer These Key Questions?


  1. Why will the business succeed?
  2. What do you want to start (or change)?
  3. How much money is required?
  4. What is the projected return on the investment?
  5. Why is the venture a good risk?


  1. What type of business is this?
  2. What products or services will you sell?
  3. What type of opportunity is it(new, part-time, expansion, seasonal, year-round)?
  4. Why does it promise to be successful?
  5. What is the growth potential?
  6. How is it unique?


  1. Who are your potential customers?
  2. How large is the market?
  3. Who are your competitors? How are their businesses positioned?
  4. What market share do you anticipate?
  5. How will you price your product or service?
  6. What advertising and promotional strategies will you use?


  1. Have you carefully described your design or development?
  2. What technical assistance have you received?
  3. What research needs do you anticipate?
  4. Are the costs involved in research and design reasonable?


  1. Where will the business be located? Why?
  2. What steps are required to produce your product or service?
  3. What are your needs for production (e.g., facilities and equipment)?
  4. Who will your suppliers be?
  5. What transportation is available?
  6. What is the supply of available labor?
  7. What will it cost to produce your product or service?


  1. Who will manage the business?
  2. What qualifications do you and your staff have?
  3. How many employees will you need? What will they do?
  4. How will you structure your organization?
  5. What are your plans for employee salaries, wages and benefits?
  6. What consultants or specialists will you need? How will you use them?
  7. What legal form of ownership will you choose? Why?
  8. What licenses and permits will you need?


  1. What is your total estimated business income for the first year? Monthly for the first year? Quarterly for the second and third years?
  2. What will it cost you to open the business?
  3. What will your personal monthly financial needs be?
  4. What sales volume will you need in order to make a profit during the first three years?
  5. What will be the breakeven point?
  6. What will be your projected assets, liabilities and net worth on the day before you expect to open?
  7. What are your total financial needs?
  8. What are your potential funding sources? How will you spend funds?
  9. How will the loans be secured?


  1. What timing have you projected for this project?
  2. How have you set your objectives?
  3. Have you set up your deadlines for each stage of your venture?
  4. Is there a relationship between events in this venture?


Have you included all important documents, drawings, agreements and references?

Five Critical Questions Your Business Plan Should Answer

Answering these questions periodically can help keep long-term goals in mind while you adjust your immediate steps and actions.

If I may adapt a line from John F. Kennedy’s famous 1961 presidential inauguration speech to make a point about business plans: Ask not what you can do for your business plan. Ask instead what your business plan can do for you.

Questions about pricing, hiring and other factors can crop up as a business grows. A detailed and often-revised business plan should help you answer them. Getting these answers can help you keep your long-term goals in mind when steering your company toward short-term milestones.

Here are five key questions and how your business plan should help you answer them:

1. Is my price right?
There are two essential components of pricing that should be included in your business planning:

  • Consider whether your price is in line with your message. If you say you offer a high-quality custom product or service, you can’t post a low price without contradicting your own marketing message. You should set your prices according to the relative value you offer, or risk confusing your potential market.
  • Your business plan should include your revenues and costs on a per-unit basis, your overall direct costs and overhead. These factors can help you establish the constraints related to making enough profit. You have to cover costs, which can include expenses beyond the direct costs of buying what you sell, such as rent and payroll.

2. Can I afford to hire?

Especially when you’re running a new company, you might not be able to help thinking that hiring additional employees might help you with the mounting list of tasks that have to get done. What would happen if you hired an extra salesperson? Could an extra administrator solve some of your problems?

Go back to your business plan and determine what happens to projections if you add the extra salary and benefits. Guess whether the improvement in people power will add to your revenue, or cut costs.

Or perhaps you should consider hiring a contract worker. Of course, hiring someone is almost always cheaper — but only if there is a long-term need that justifies adding the fixed costs. If it’s a short-term need then the cost won’t affect your overheard forever.

Either way, working those numbers won’t eliminate the uncertainty but it can make it easier to understand the variables.

3. Am I implementing my strategy? 

Test your strategic alignment: Do your milestones, spending for marketing activities and new product or service development, and related expenses show the same priorities that are reflected in your strategy? In my business planning coaching I’ve repeatedly run into client situations in which people say one thing in their strategy but do something different thing in their actions and spending.

For example, you say you’re going to emphasize your extensive computer expertise in your strategy, but you pay your service staff below market rates. Or you say you’re going to emphasize one side of your product line, but your advertising spending emphasizes the other.

4. Can I afford to relocate?
Sometimes new business owners need to relocate to help cut costs, or want to take better advantage of a prime sales area. If you need to switch your location, get back to your basic numbers and break the problem into its business plan parts.

Estimate how much more your monthly rent will be at the new location. Also estimate your moving costs, costs for fixing up the new location and costs of the business lost while you’re absorbed in the move.

Then adjust your sales forecast to either add in the additional business you’d be able to do there or the costs you’d be able to cut. If you don’t see enough long-term improvement, then perhaps you shouldn’t move.

5. Am I stunting my own growth?
Go back to your business plan and give your assumptions a fresh look. Consider your target market and strategy, and add in your business offering and distinctive differences. Does your business offering match your market? Are you sending the right messages to the right kinds of people?

Think about things you could easily add on to sell more per customer. Is there some low-hanging fruit you’re missing? Maybe your restaurant customers, for example, want mugs, t-shirts or desserts. Maybe your computer services clients want automatic back-up services, or system upgrades.

Now look at marketing. Is your message changing enough to match changes in the market? Is your marketing mix adjusting to technology and media and social changes? What if you spent more money and time on marketing? Could you increase sales?

Your business plan isn’t a static document — it’s your best tool for steering your business. Answering these questions periodically can help keep long-term goals in mind while you adjust your immediate steps and actions.


Create a Business Plan by Answering 4 Simple Questions

This post focus on advice for new entrepreneurs.

There are a lot of would be entrepreneurs out there with a great idea, but are afflicted with Business Plan Paralysis. Instead of shipping product, they’re “working” on their plan, doing more “research”, or “thinking about it”.

I think the current literature on entrepreneurship overcomplicates things. Read the guides or, and you run into 50 page documents with charts, spreadsheets, and financial projections accounting for every dime. And if these sources are to be believed, your business plan must also have serious sounding sections like Executive Summary, Competitive Analysis, and Financial Projections.

No wonder would be entrepreneurs stall at this step.

The good news is that you don’t need that kind of plan right now.

Right now, all you need is an internal working plan to get you going. And to get that working plan, all you need to do is answer these four simple questions.

  1. What is your product or service?
  2. Who are your customers?
  3. When will things get done?
  4. When are bills due and when do you get paid?

1. What is your product or service?

What are customers going to give you money for?

Every company exists to create new value. That’s what customers are paying for. What do you do to earn your income?

A few examples:

  • The service provider (barber, accountant, dry cleaner) creates value by providing a service you’re willing to pay for.
  • A retailer (hardware store, car dealership, eBay seller, etc) creates value by connecting consumers and product manufacturers. Retailers buy inventory in bulk, split it up, showcase it, market it, teach customers how to use it, deal with returns, etc. For that work, they charge a markup on the product.
  • A blogger (or other website publisher) creates value by providing information and a forum for people to discuss stuff. If the content and community is great, there’s a lot of value (lots of readers and page views). The more readers, the more the publisher can charge for advertising.

So back to the fundamental question. What do you do? What’s the value your business is creating?

Equivalent sections in a fancy plan: Executive Summary, About Our Product/Service, Company Description

2. Who are your customers?

2a. Who’s going to give you money? Who are you marketing to?

Write down all the potential customer profiles you think you will have. Your customers may come from multiple sources or have different needs.

For example, if you’re opening a local brick & mortar store, you might have walk-in customers, regulars, and online customers.

For content publishers, you’re serving your readers (every page view or feed subscription is a “sale”), but you’re also serving advertisers or affiliated vendors (the people who actually give you money).

If you want to flesh this out even further, you can create customer profiles and evencustomer personas with names and personalities.

Marketing and selling to each type/group will require different strategies and tactics. The first step though, is to identify these groups.

2b. How many potential customers are there?

There’s no point selling a product if there are only a handful of people interested. How big is the group of people who might potentially buy from you?

You can look at your competitors to get an idea of the market size.

eBay sellers can look at the number of feedback received in the last 1, 3, and 6 months. Bloggers (content publishers) can look at the number of page views and/or feed subscribers of other sites in their niche.

To determine a website’s reach and traffic, you can also use third party trackers likeAlexaCompeteHitWiseQuantcast, or comScore.

If you need more extensive data, you can find a lot of information via Google. There are a lot of surveys and research papers available for free. You can also find teaser releases from research companies looking to sell you more in-depth analysis.

For analysis of public companies, check out Hoover’sLexisNexis, and S&P’s industry surveys.

2c. Who are your competitors?

Imagine you’re one of the customer types you described in answer 2b. Other than your new business, where else could these customers go to get the product/service?

Equivalent sections in a fancy plan: Market Analysis, Target Market, Primary (and Secondary) Markets, Marketing Strategy, Marketing Plan, Competitive Analysis/Advantage, Market Size

3. When will things get done?

Given the specific customers you describe above, how do you plan on reaching them? Will you buy ads, encourage referrals from existing customers, create a website?

This is when we get to the nitty-gritty. Write down concrete action steps and scheduled milestones.

3a. What does your company look like in 1, 3, and 5 years?

Answer this quickly. It’s okay to “dream” a bit here. Three to five years is a long time away, and the point of this article is to get you past planning mode and into execution mode. So dream a little bit. Once you’re actually executing, you’ll have a better (more realistic) idea of what to aim for in 3 to 5 years.

3b. In the next 3, 6, 12 months, what are specific milestones you want to accomplish?

Be as specific as possible, without getting bogged down in too much detail. Otherwise, you’ll be stuck in the dreaming mode for another 6 months instead of being in startup mode.

For milestones farther out, just jot down general goals. A common sticking point for new entrepreneurs is trying to plan for every possible scenario 12 or 24 months out. That’s impossible unless you can see the future. (If you can, drop me an email. I’ve got work for you.)

3c. What are specific next steps you need accomplish to reach the first milestone? What can you do today?

For the first milestone (within 3 months), what are tasks that need to be done? For each task, what is the next action step? Who’s responsibile for doing it? When will it be done?

The more specific and actionable your answers, the more likely you’ll move this project along. Write down some actionable tasks you can knock out today, this week, and this month.

Equivalent sections in a fancy plan: Implementation Strategy, Milestones and Timeline, Exit Strategy

4. When are bills due and when do you get paid?

4a. How much money will it cost to make your product or provide your service?

Write down all the things you might have to pay for while launching or running your business.

Your expenses will fall into three categories: fixed expenses, variable expenses, and capital expenses.

Fixed expenses are the things you have to pay for every month, whether you make one sale or 10,000 sales. Hosting, rent, employees are examples of fixed costs. Add up your fixed expenses, and you have the baseline cost of running your business.



by Joseph R. Birkner

Steps 1 to 12 Entrepreneurship, business skills needed for success, choosing the perfect business, business startup basics, procedures, stationery, equipment, mail order start up, where to find products to sell, how to create your own products and more…
Steps 13 to 22 How to approach suppliers, finding products, Information products, advertising, order filling, distribution and more…
Steps 23 to 35 Information products, advertising, order filling, distribution, avoiding TV hype and false promises, profit margin needed for success, controlling your product and information, Getting FREE publicity, mailing lists, E Mail Marketing, Internet, Networking…and more…


Starting a home business is the dream of millions of budding entrepreneurs. Maybe you have also thought of starting a home business but for one reason or another you never got around to it. Now, perhaps you are laid off or ‘down-sized’ and must ‘do something’ to survive. Maybe you are retired or perhaps you need extra money, whatever your motives are for wanting to become more independent financially or mentally, here are some step by step tips on how you can get started in a home business of your own.


It has often been stated that an entrepreneur is a risktaker. Although that is true to some extent, my definition of an entrepreneur follows: “Entrepreneurs are not risktakers, rather, they see opportunities and seize them!” You will have to be a self starter and not depend on others. For example, when you worked at your “regular job” your boss ‘fed you work’ and you had to do whatever job you were given even though you hated it. On payday, you got your reward. As an entrepreneur, you’ll have to find WHAT you want to do, HOW to do it and WHERE to sell your creation or service. You’ll spend more time than you’d ever imagine but you’ll enjoy it better.


For instance, if you enjoy woodworking, then try to establish a business involving woodworking. Some thoughts that come to mind are making wooden novelties, birdhouses, whirligigs (wind toys), crafts or even building decks and sheds. Start with your hobbies to find a potential business opportunity that you already enjoy. If you do what you enjoy, the money will come, unless there is no market. So, don’t hock the family jewels to start a buggy whip manufacturing business!!


Computers are big now and will be the growth area in the future. Learn a word processing program such as Ami Pro, Microsoft Word, or Word Perfect. You don’t need the fastest, most powerful computer to do a decent job and you don’t have to spend a lot of money on a computer or on training either. Used computer stores and mail order suppliers listed in computer magazines have good computers for low cost. Check out your local computer users group or your local adult education programs offered at local high schools and colleges for low cost training. Ask your reference librarian for help or check the “yellow pages “…but do it now!!


The ‘perfect’ business in my view is one that you enjoy and is fun rather than work. For example, I always liked to tinker and build all kinds of contraptions from discarded items. I’d never throw away anything away without first dissecting it and salvaging good parts that I could use for other “thing-a-ma-jigs”. I once built a simple metal detector from electronic parts that I “stole” from a broken radio. I used a few resistors, a capacitor, some lamp cord wire [for the search coil] scrap plywood to mount the components and an old broom handle to hold during searching. Oh yes, the receiver was a cheap working transistor radio tuned to the right frequency and attached to the broom handle with [thick] rubber bands I cut from a bicycle inner tube that had a blow out. Despite the “Rube Goldberg contraption”, it did and still does work and I’ve found several coins with it and lots of bottle caps!!

You too have many hidden untapped talents that you can use to start and build your own business at home. Start by making a list of your hobbies and interests for getting ideas. When you do what you love, it is fun and not work!


A friend of mine, an accountant, said that someone asked him to ‘get involved’with designing and setting up web pages on the Internet. This sounded like a great opportunity, and when my friend told me that he knew nothing about web page design I told him to either get knowledge from books or seminars and courses or find a business that he understands and enjoys. Not having the time or interest to pursue web page design, he followed my advice and, several months ago, he set up a financial investment service business which was related to his accounting background. So, to get going fast, start the business that is closely related to your interests. Go with what you know!!


A business license costs about $10. Request 2 or 3 extra copies of the license with the official city seal on it, your bank will need an official copy for their files. Before a license is issued, the clerk checks the files to see if the business name you picked is available and is not already used by another. A DBA “doing business as” account is one such as: Mary Jones doing business as (DBA) “ABC Company”.


Usually, a DBA checking account is FREE. You need the business checking account to cash your customer’s checks made payable to your business. If you do not have a business checking account, then you can’t cash or deposit checks. When opening a business checking account, the bank will ask for your business license and some form of ID such as a driver’s license. Start with a small deposit say, $100 and you’ll soon get your printed checks and you are ready for business.


You must have business stationery ie. a printed envelope and letterhead and a business card in order to do business with suppliers. A local print shop such as “Staples”, “Office Max” and others can quickly print a small quantity (500) of each or you can type set your own with your computer and save some money. Don’t get fancy with your printing when you start out. Avoid paying for special logo designs when you can use a stock “:logo cut” at very little extra cost, but a logo alone, does not necessarily sell more of your offers so keep your printed stationery simple.


A business phone and a business answering machine with a professional outgoing message means that you are serious. Avoid using your personal answering machine and home phone as your business one too. Often I have reached ‘businesses’ that were answered by children or that had barking dogs in the background. When you answer the phone, say your company name, such as “ABC COMPANY, John Smith speaking..May I help You?” rather than a personal “hello”. Also, with your business phone you get a free one line yellow (& white page) listing for your business. The cost for a business phone is under $20 a month (basic service) with a one time installation charge of about $100. Buy an answering machine with a speaker phone so you can speak while you read or write. I use Phone Mate #8200 ($39.95) with good results.

An example of how having a business phone listing paid off was when a book publisher called directory assistance under our company name to see if we had a business phone before he agreed to work with us!! So, look professional and act professional and you’ll be treated with respect and opportunities will come to you seemingly out of the blue. I believe that the SMARTER (not the HARDER) you work the LUCKIER you get!!


Starting a mail order business is another popular ‘easy entry’ way to start a home based business with little investment. The big problem is to find a product or information to sell. Reading and responding to classified and display ads in printed opportunity magazines, on-line business magazines and E Newsletters such as this one is an excellent way to gain entry into the mail order or direct marketing business with little money. Note, too, how and why the particular ad you responded to got your attention. Pattern, but do not copy, your own ads the same way. Example: use the word FREE if possible in your ad to get attention fast or use an attention getting ad such as “MAKE 1998% PROFIT SELLING INFORMATION!!”


Trade shows, magazines, newsletters, on-line publications, manufacturers, and importers are good places to look for products to sell.

For trade shows, contact the Chamber of Commerce in your area. Also, contact local convention or trade centers via the Chamber of Commerce in any large city for a calendar of up-coming trade shows which are typically held annually. To attend these shows, you must be “in the trade” since they are not open to the public. Sometimes you may be able to get a free pass and badge from a sponsor. I’ve attended many trade shows in Chicago, New York City and in Boston just by contacting the sponsor and telling them that I am a direct marketer seeking new products.

You can directly contact manufacturers and suppliers requesting their wholesale prices (remember to use your business stationery). The companies can be found in the Thomas Register of American Manufacturers (22 volumes; 1997 cost $240) under 55,000 product & service headings. This valuable resource looks like a big green encyclopedia and is available in any large public or college library.

Contact a local field office of the Department of Commerce for Importing/Exporting information in the blue pages phone book under US Government Listings. Your local library and especially the business library of a College or University is an excellent source of business books, publications and trade magazines where you can get ideas for products that you can sell.


Invent your own products by improving existing products. I taught a creativity seminar and asked the students to find as many uses as possible for a piece of fluorescent property marking tape. In 15 minutes they brainstormed over 167 uses!! Some were: fuel; toilet paper; decoration; a belt;a bikini; a hat, bookmark, fishing lure etc. Try brainstorming on any product that you want to improve. Simply list as many ways that come to mind in say, 20 minutes, of how you can improve the product. The more ideas the better regardless of how seemingly silly or stupid they may seem to be at first. Don’t stop to evaluate any of them now, rather just let your creative juices flow and you will find that you too can invent!!

Avoid responding to late night scam invention marketing companies who promise you the world and fail to deliver anything. Some highly touted companies may be fraudulent. Contact and question the Federal Trade Commission about the reputation of any invention marketing firms that you are considering. Do this before submitting your ideas and your money to them. Deal with reputable firms. The Patent and Trademark Office provides patent and trademark protection to inventors and businesses. It offers some information on invention marketing companies also that you may want to check out. It grants patents on inventions registers trademarks, publishes patent information and maintains files of U.S. and foreign patents for public use. If you invent a new product ask for information regarding patents and trademarks: Contact: U.S. Department of Commerce, Patent and Trademark Office, Washington, D.C. 20231 or call 703-308-4357.


Using your word processing program or typewriter, write a simple, cordial, yet professional letter to the principal of the company such as the President (for small companies only) or Sales Manager. Avoid sending “dear occupant” letters, rather, look up the key executives names and titles in “Standard & Poors Directory of American Corporations” (available in the library) or call the company directly to get the name of the decision maker you need to contact. Use your business stationery to conduct business with suppliers. Sending requests on postcards or with hand written notes on tablet paper will be ignored. Also, if there is a charge for a catalog and you don’t include the payment, don’t expect to receive a reply. Why should a supplier, mail order dealer or business person mail out product literature and samples to “curiosity seekers?”


Unless you have a good profit margin (preferably, at least 3 to 4 times your cost) you can not make any serious money reselling products, with few exceptions. You can find high profit products from inventors who may have a garage or basement full of products, packaged and ready to be sold. You can place a “Products Wanted” ad in a newspaper and have suppliers contact you. Also, a good source of new products is foreign trade sources. Your librarian can help you find several importing resources. Also, the US Department of Commerce listed in the blue pages of your phone book can help with import/export issues. The yellow pages of your phone directory has listings of importers in the USA who have already imported the type of products you want. By dealing directly with these “import/export brokers” you can save the hassles of paying duty on imports and of currency exchanges and of waiting for slow delivery. Their relatively small service charges outweigh the potential, costly problems that an amateur importer may experience.


Don’t spend a lot of money on display ads until you know that your product will sell at a profit. Using hard hitting, attention getting words in your ad such as:


Test! Test! Test! Try various ads and placement until you find which ones work best, then run the same order pulling ad in other publications.

Key your ads so you will know where the responses are coming from. For example, you can vary the spelling of your company name as a key, or you can use a department number or a suite number. Examples: “My Mail Order Company” can be keyed as “My Mailco”; MMailo” “My Mail Order Comp” etc.


Fill orders from a small stock of inventory you have on hand. This allows you to quickly respond to customers with a product you control without depending on drop shippers to fill your order. This also eliminates errors by third party material handlers. Use drop shipping for large, hard to inventory expensive ($100++) products that are sold in low volume. For high volume fast sellers, it is best, we have found, that it is faster to handle and fill all orders in house or locally, from stock on hand. Later, as sales volume increases, you may want to hire a fulfillment company to pick, pack and ship orders directly to your customer while billing you for their services.


Don’t plan your world cruise on the initial success from your first few product sales. It takes time to build a business. Reinvest profits wisely in new products.


There is only a limited amount of hours in a day. At first, do as much of the work in your business yourself, but know when to ask for and use help such as sales professionals. Sure, you have to pay dealers a commission, but they will reach markets that you can never reach alone.



A quick way to launch your business is to buy “ready made” QUALITY books and reports that you can use NOW!! Later, add your own creations to your product line. A number of book publishers, mail order dealers and close-out sources often carry overstocked books called remainders at a fraction of the cover price. Check your phone book or contact your local book store for inventory. If you chose to sell used books for which there is a big market, consider yard sales, flea markets, bazaars and schools which are a great source of good used books, Profit margins, for these books are typically less than for your own materials because the publisher had to produce the book, promote it and pay royalties to the author. Margins can run 30 to 1000+% but normally average at about 50-75% range on a book by book basis. Used books, obtained at the sources mentioned can return 1000+% profit.

You can create your own info-products if you have the time and know how to do it. The high profit, approaching 2000%, comes from the low production cost of copying reports, books and booklets for which you have acquired the “rights” from the originator, copyright owner, or “prime source”. Depending on the size ie. number of pages, of the info-product, and the quantity you reproduce, will determine your cost. Usually, your cost is a fraction of the retail price of the material offered to the buyer. For example, a 24 page book on “MAIL ORDER SECRETS” that retails for $25-$35 may cost only $1.20 to produce in small quantities or as little as $0.75 in 2000 lot quantities thereby resulting in enormous profit potential to the dealer. Caution: It is illegal to reproduce copyrighted reports and books without the written permission of the copyright owner. Reprint rights certificates are granted to dealers who have paid for that privilege.

Copyrights provide protection from copying for literary, dramatic, musical and artistic works. They can be obtained for $20. The Patent Office does not handle copyright registration, rather, contact the Library of Commerce. To protect, say, your new information product such as a book, report or article, request FORM TX and Circular 1. “Copyright Basics”: from Register of Copyrights, Library of Congress, Washington, D.C. 20559-6000 or call: (202) 707-9100 [24 hr. Forms Hotline].


People pay for information contained in a report and do not necessarily care what the report actually looks like PROVIDED the information is what they were looking for and not just a rehash of commonly available information merely repackaged. A one page report containing important data useful to the buyer, such as a financial newsletter that may cost $25 for a single page may be worth 10 times the cover price for the value of the information conveyed to the reader, while a single page report, poorly written or containing useless general information is not worth the cost of the paper it’s written on. So, insist on quality, and with your newly acquired computer skills, you should be able to deliver a quality document with little effort. Give your customers what you want.


Avoid placing expensive display ads without first testing your offer with a small, low cost, classified ad. Ads placed in local papers will run quickly, unlike ads placed in magazines which often have closing dates 1-2 months in advance of your actual ad placement date. In other words, you should know whether your ad pulls orders sooner when placed in small newspapers than in magazines. Consider other faster, inexpensive means of test advertising such as E Mail and the Internet as discussed later, where your ad is placed practically instantaneously in those media with world-wide exposure to potentially millions of prospects. Always test your offer before you invest large sums of money on any advertising campaign. It is wise to vary your offer in price and content depending on where you place your ad. If your product appeals to both sports fans and to investors you should put a higher price on your offer targeted to investors who may more readily recognize the value of your offer than a sports fan. Test, test and test again, then repeat ads that out pull another test ad while eliminating or modifying the lesser pulling ad.


Fill orders from a small stock of copies you have on hand or copy as orders are received. Keep a small inventory of books that you acquired from publishers or other sources mentioned and fill orders from stock. Backorder, as needed.


After the sale to your customer, you should be prepared to offer additional related information and products to your customer. That’s why you should strive to expand your line with new materials and money-making offers.


It’s a big world out there!!! You can not, alone, reach all of your best prospects, due to time and money contraints. Sure, you can do a lot of the ork yourself, at first, but soon you will discover that there are experienced dealers and distributors who know how and where to market YOUR products and information and make you both more money than you could make alone. The small commission paid to your dealers is well worth it.


For example, don’t buy new office equipment when you can ‘get by’ with some used ones. Go step by step constantly testing the market. Stay with product lines that work and eliminate those that are duds.


Building a business takes time, effort and money. Sure, a lucky few did make lots of money fast, but they don’t tell you how much it really cost them and how many other false leads they followed to achieve success. Realistically, at first, shoot for earning a few hundred dollars a week by inexpensively marketing good products and information having nice profit margins. Fill orders from inventory to control business activity.


You need at least 3 or 4 times your cost to make money because advertising, overhead, postage, product costs, and your salary must be included. Avoid low margin products or you’ll go broke fast!! As mentioned, there are products available that allow 400% profit margins and information products with 1000+% profit margins. If you try to obtain these suggested margins then you are on the road to success. If you try to sell a product that costs $2.00 for $2.75 you will certainly fail to make a profit because the operating expenses will consume your slim profit margin.


Another important key to success is to control your product or information. You become the supplier letting others help you sell your product. You achieve this control by buying products or directly from supplier aka “prime source” at below wholesale prices or by creating your own materials.


Get FREE Publicity for your Company by writing press “news” releases to area newspapers. Editors will not print releases that are overly commercial. News items will normally be printed. Instead of writing a press release, call the editor, then briefly state why your home business would be of interest to readers. For example, YOUR business helps people…save time, money etc…and, other readers can learn from your experiences to start their own business too. Tell the editor that you are available to be interviewed for a feature story to be written about you. When you “GET FREE PRESS”, send me your clipping and remind me that I told you so!!! Good Luck!!


Always start out small, avoiding big cash outlays. Take one small step at a time but START!! Don’t procrastinate!!

The Directory of Business Development Publications offers publications to help you build and manage your business. FREE counseling for business is offered through several dedicated organizations: the Service Corps of Retired Executives (SCORE); Small Business Institutes (SBI’s); Small Business Development Centers (SBDC’s) and a number of professional associations. Contact: U.S. Small Business Administration Mail Code: 2550, 409 Third Street, S.W., Washington, D.C. 20416 or call: 1-800-827-5722 to request publications or assistance.


Typical mailing list customer response rate is just 3% (considered to be very good by industry standards). This means that if you mail your offer to 1000 persons you can expect only 30 replies and not all of them contain orders. To mail 1000 pieces of your offer is costly. Postage alone (at current first class rates) is $320, so don’t use direct mail at this time. Later, when you build a customer base, you should mail them additional (back end) offers from time to time and, these customers who already purchased your initial offer are very likely to respond to your other follow-up offers especially if you provided good service and quality products and information they wanted. Expect response rates of 10 to 15% at that time.


Consider marketing via E Mail by offering FREE reports and valuable information, product sources and tips. Subscribe to E Mail Newsletters such as the one you are reading now and place low cost test ads to get world wide exposure for your offers. Perhaps, after you gain experience, you may want to create your own specialty E Newsletter for your interest such as inventing, woodworking, home repairs, energy sufficiency, etc.


Consider Internet advertising, perhaps on your own web page or on a high traffic mall, but remember that you (or the promoter) must publicize your electronic mall usually by print advertising or via E Mail. A low cost classified ad can effectively create “hits” at your web site or “mall”. Your ad may say: ” FREE MONEY MAKING OFFERS TO ALL VISITORS TO…YOUR WEB SITE” or have professionals handle creating, promoting and maintaining your site for you.


Tell everyone you meet what you do and listen to what THEY do. Offer to exchange business cards and refer clients to them. Also, if you see an interesting article that is related to the other person’s business, clip it and mail it to them with a note that says: Thinking of you…here’s an article you may find of interest. This little tip works wonders.

(Joseph R. Birkner is a writer, direct marketing consultant, inventor and President of Star Research Company a prime source supplier for unique high profit products and inventions and How-To Information. Contact him directly at Star Research, S’N S Plaza, POB 2121, Peabody, MA. 01960-7121 or E MAIL to:


How to start a newspaper with no skills, no staff, and no experience

Courtesy of Maureen Mann, managing editor, The Forum, in Deerfield, NH, 2006



  • Don’t believe what anyone tells you, whether about how likely you are to fail or how easy it is to succeed.
  • If you want advice, ask for money.
  • Promote your venture. Get all the publicity that you can.  Each new article, each new contributor, each new reader, and each person you tell about the paper will help it grow.
  • Don’t fear lack of content.  Nobody is reading you much in the beginning so everything is new to each new reader.  Just keep reporting.
  • Don’t fear lack of staff.  Ask every one you meet if they would like to contribute and, maybe months from now, many of them will.  Explain that if something interests them it will interest someone else as well.  Don’t ask them to write for the newspaper, ask them to write about X.  Just keep asking.
  • By about nine months [a coincidence?], your biggest problem won’t be lack of content or staff any more.  It will become lack of trained editors and posters to get the material up on the site as it rolls in faster than you can handle it.
  • Your biggest problem will constantly change.
  • You will handle each new problem as it comes along; even though you might feel overwhelmed at the time.  Just keep going.




  • Start with the most basic web hosting service, with the least amount of required ‘html’ code. You will outgrow it but it will be easy for neophytes to learn.  We started with bulletlink.  We learn more about its shortcomings every day but it got us started and has allowed us to grow.
  • Establish a few simple standards for style, numbers, headlines, and the like and stick with them.
  • Ask contributors to write in a way that makes posting easier. For example, require block paragraphs and adherence to agreed upon formats.
  • Start editors/posters out with basic tasks such as posting news, opinions, and letters which require minimum code; move to adding one or two pictures; then to imbedding links, and so on.  Don’t let people feel overwhelmed.
  • Train new regular contributors to post as soon as they are comfortable doing so.  Add tasks as people are willing/able to handle them.
  • Be sure someone in addition to the author proofs all posted items!!



  • Resist the temptation to be expensive or glossy.  Once the content is read the edition will be thrown away anyway.  Make the paper good enough for the reader to distinguish the content of photographs, but not better.
  • Use a format/software that is convenient for your printer.  We have moved from Microsoft Publisher to Adobe inDesign which will allow us to email the print editions to the printer.
  • Secure a non-profit (or for-profit) bulk mail permit and learn all the regulations. Don’t depend on the USPS for correct information or much direction.  Do as much presorting as possible to reduce costs.
  • LIE!  Lie to those submitting content about when it is due.  Lie to your advertisers about when copy is required.  Lie to editors about when proofing must be completed and pictures submitted.  Every single step of the way people will be late so expect it and plan for it.
  • Plan for a four to six-hour session before the edition goes to the printer.  Have a group go over every inch of it, and check and recheck each other.   There will still be mistakes that jump out when you see them but you can minimize them.  Laugh about the ones that get through.
  • Expect natural and unnatural disasters.  We have had a flood, a major storm and a three-day power outage interfere with final proof sessions.  You can’t do anything about it, but anticipating makes it less stressful.
  • Decide if your goal is content or income.  If content, don’t expect more from advertising income than to cover the print expenses.


After One Year


  • If you have established credibility with readers, local boards, schools, police departments, and the like content will not be an issue.
  • Training of photographers, photo and copy editors, news reporters, site posters, will become an ongoing need.
  • Finding a balance between covering costs but not overwhelming the site with advertising will be another ongoing issue.
  • New procedures, jobs, and ways to delegate and specialize will have to be determined; you may even have to establish a paid management position.  The “lets start a newspaper” enthusiasm will give way to the practicality of running a newspaper.  But keep it fun.


Final Thoughts


  • Don’t compare yourself to any other project.
  • Don’t forget why you started doing this.
  • Have fun!

Financial Audit and Control Services

Financial Audit and Control Services by SBC

  • Internal and External Audit
  •  Audit and preparation of financial statements for bank borrowing purposes.
  • Income/ Sales Tax matters including e-filing.
  • Development of internal control system for effective management

Taxation Services

(a)   Income Tax:

  • Applying for and obtaining National Tax Number (NTN) Certificate.
  • Preparation and filing of Annual Income Tax Returns, Wealth Tax Statements and Annexures.
  • Preparation and filing of periodic Withholding Tax Statements (WHT).
  • Appeal filing and Adjudication at various forums under Income Tax Ordinance, 2001.

(b)   Sales Tax:

  • Applying for and obtaining General Sales Tax (GST) registration.
  • Advices and pursuing in claim for adjustment of input and output taxes, following up GST exemption(s) and GST audit.
  • Representation on behalf of the clients before GST assessment authorities and appellate authorities on contentious GST issues and dispute resolution.
  • Correspondence with the Federal Board of Revenue (FBR) for removing fiscal anomalies and obtaining Ruling on GST related issues.
  • Reviews of existing systems and monitoring to highlight possible areas of exposure to sales tax assessments and associated penalties.
  • Appeal filing and Adjudication at various forums under Sales Tax Act 1990.

Compliance to SECP/Corporate, Tax Matters and Accounting Services

Compliance to SECP/Corporate, Tax Matters and Accounting Services


A Private Limited Company incorporated in Pakistan is required to comply with certain requirements of various laws and related rules/ regulations.Synergy Business Consulting will be pleased to provide you professional services to meet the following requirements, so that management of the Company can focus on its core business.


  1. 1.      Requirements under Company Law:


a)      Maintenance of  Books of Accounts:


  • Cash Book
  • Ledgers



b)      Annual Submission of Statutory Forms to SECP:


  • Form A
  • Form 29


c)      Annual Audit of Accounts by the Firm of  Chartered Accountants


  1. 2.      Requirements under Income Tax Laws:


  • Filing of Income Tax Return of Company in December each year.
  • Filing of Income Tax Return of Directors of Company in September each year.
  • Filing of withholding tax statements on monthly and annual basis.


  1. 3.      Requirements under Sales Tax Laws:


  • Online sales tax registration
  • E-Filing of monthly sales tax return.
  • Maintenance of Supply, Purchase and Stock Register


  1. 4.      Book Keeping and Accounting:

Maintaining computerized accounting record is indispensible for companies of modern days. We will prepare books of accounts (manual and/or computerized) of the Company as per need of various internal and external users.


Corporate and Business Registration Services

Corporate and Business Registration Services by SBC

  • Sole proprietorship/ Sole trader/ One person business registration
  • Partnership Firm (Minimum two and maximum twenty persons can form a partnership firm).
  • Incorporation/ Formation of Private Limited Companies, Foreign Companies (Branch and Liaison Office) under Companies Ordinance 1984 with Registrar of Companies, Securities & Exchange Commission of Pakistan.
  • Incorporation/ Formation of Single Member Company (SMC) Limited Companies under Companies Ordinance 1984 with Registrar of Companies, Securities & Exchange Commission of Pakistan.
  • Incorporation/ Formation of Public Limited Companies under Companies Ordinance 1984 with Registrar of Companies, Securities & Exchange Commission of Pakistan.
  • Applying and obtaining license and Incorporation/ Formation of Not For Profit Companies (NGOs, INGOs) under section 42 of Companies Ordinance 1984 with Registrar of Companies, Securities & Exchange Commission of Pakistan.

Value addition in small dairy products

By Dr Rao Zahid Abbas, Dr Zafar Iqbal & Dr Abdul Jabbar

DAIRY farmers today are facing difficult times. Low raw-milk prices, rising farm costs and environmental concerns combine to create obstacles which are difficult to overcome.

One possible way for small and medium-size dairy operators to improve their situation involves processing their own milk into bye-products, a move offering an efficient way of adding value.

Strong interest exists for reviving the old way of marketing products if it can be accomplished profitably. Many view this as a way of going to market with fresher products that are locally processed and meet all standards along with developing a stronger community support programme.

Operators of small dairy farms (35 to 300 cows) know they can control more of the profits in their raw-milk product by directly marketing the finished products to consumers.

Though, the FDA regulations and the Pasteurized Milk Ordinance remain the strictest codes worldwide confronting dairy farmers, they still allow on-farm processing as an alternative to a raw milk-pricing situation. If done properly, this can prove an excellent value-added opportunity.

The key issue is marketing. Key products that can be produced efficiently are milk, yogurt, soft and hard cheeses, ice cream and butter. Developing a “niche” market is vital to achieving success with an on-farm processing plant.

Also important is deciding whether to pursue direct sales or utilize established, independent retail stores as a distribution channel. Dairy farmers that have met the organic requirements are one step further in having available markets open for their products.

Many supermarkets are readily available for organic milk, yogurt, butter, ice cream and cheeses. Pakistani dairy farmers realize what’s occurring in other parts of world, and how dairy farmers are adding value to their milk via on-farm processing systems. Time will tell how many farmers will consider this opportunity and whether they can step out of the box and develop a local market.

Dairy farmers who have large metropolitan markets near their farms possess an advantage in developing all kinds of ethnic products for these markets. Pursuing this avenue will require them to go off the farm or hire a marketing company to help them develop these markets.

Farmers have been limited in pursuing on-farm processing primarily because companies are not manufacturing pasteurizers, homogenizers and tanks small enough to meet the needs of this specialised market. Now, farmers can obtain properly sized equipment from various suppliers to realize viability in the select markets they serve.

Today, pasteurizers exist ranging in per-hour capacity from 55 gallons to 265 gallons. Insulated tanks are offered in sizes starting from 50 gallons up to 275 gallons. Butter churns are available in either five-gallon or eight-gallon versions. Bottling machine ranges between 100 gallons per hour capacity up to 500 gallons per hour.

Making this modest-sized equipment available is vital to on-farm processors since they typically are serving just five per cent to 10 per cent of the entire dairy market by realizing profits in selling to an upscale market, often through gourmet food stores. This is where these types of farmers can gain a premium for their products, not by pursuing big markets that the mega-sized processors serve.

In all cases, farmers must consider the following issues:

* Is this right for their farm?

* Do they have family that is interested in this concept?

* Is the family in full agreement in this concept?

* Will they have to hire off-farm individuals to work in the processing plant?

* Are they willing to develop long-term financial plans for this venture?

* Are they willing to hire a marketing consultant or work with a university to do their marketing and product planning?

In developed countries, the on-farm processing movement isn’t trying to take customers away from the co-operatives; it’s trying to save the small, family farm. As an example of the difficulties facing small farms, a North Dakota farmer with a 60-cow herd in a remote location recently was informed by his co-op that the organization determined it wasn’t financially feasible to continue picking up his milk output. For this type of operation and situation, on-farm processing makes sense.

Grape growers have made the conversion to managing small wineries. Fruit orchard owners have realized improved situations by processing their own apple sauce or apple butter and selling either wholesale or retail.

Dairy farmers also have the opportunity to realize the benefits of adding value to their raw farm products. On-farm processing isn’t for everyone; but the prospect for the small dairy farmer to make bigger profits is predominant. With the right environment, planning, marketing mix and equipment, this concept can add substantial value to their product.


Statement of the Chairman SECP at Workshop on Proposed Recommendations and Action Plan on Study, Simplification and Promotion of Laws and Procedures for Corporatization of Small and Medium Enterprises

Statement of the Chairman SECP at

Workshop on Proposed Recommendations and Action Plan on Study, “Simplification and Promotion of Laws  and Procedures for  Corporatization of Small and Medium Enterprises”.



Distinguished Guests

Ladies and Gentlemen



I appreciate the opportunity to be with you here today. Let me begin by thanking the Ministry of Industries, Government of Pakistan for inviting me to speak today. This is an important gathering, where you will be discussing the most significant issues facing the SME sector of the economy, and it is an honor and a pleasure having the opportunity to help kick off the workshop.


The Securities and Exchange Commission of Pakistan, essentially responsible for the development of corporate sector in Pakistan, fully recognizes the significance of a well promoted and growing Small and Medium Enterprises sector of the economy and envision that the sector would form a backbone to the corporate sector. The Commission has specifically emphasized on the development of the sector and has taken several radical reforms geared to promote corporate SMEs growth and to extend the benefits of corporate status to small and medium enterprises in the country. The initiatives in this direction includes legislative changes to introduce the concept of Single Member Companies (SMCs) in the Companies Ordinance 1984 and setting forth a comprehensive regulatory framework for SMCs to effectively facilitate sole proprietors embracing corporate status. Besides, the Commission has taken several radical reforms in its operational areas that have eliminated the bureaucratic mind set and made the processing smooth and efficient.

The Commission has evolved an expeditious corporatization process at our front end Company Registration Offices (CROs). A company can now be incorporated within three days, far less time compared to any other contemporary jurisdiction and drastically less then the past. Further, to facilitate the corporatization various web based facilities have been provided including a series of guiding booklets and facility of name search on the SEC website. Our revamped procedures have enabled the CROs to render public services promptly. It is a pleasure to mention that Commission has reduced the incorporation fees for small companies to boost corporatization of SMEs. It is also pertinent to mention that an efficient automated environment at the CROs not only ensure maintenance of easy-to-access corporate records but would also help us to step forward towards online registration and filing of documents as well as on-line access to corporate records. All these efforts are made with a view to provide a conducive and enabling environment for the healthy growth of corporate enterprises, protection of investors and creditors, promotion of investment and development of economy.


Indeed, while starting with our reform agenda that targets to further strengthen the existing legal and policy framework for corporate sector, the Commission envisioned this comprehensive research study on the “Simplification and Promotion of Laws and Procedures for Corporatization of Small and Medium Enterprises” in 2004 in collaboration with the Ministry of Industries and Production. The objective was to study the impact of the prevailing laws and regulations and to suggest measures as to what further amendments shall be made in the legal, fiscal and non-fiscal and policy framework to facilitate the corporatization of SMEs. Here, I would like to mention that the corporatization phenomenon has globally witnessed an unparalleled growth among the business enterprises, due to the benefits it offers. The advantages of a well-functioning company structure in a conducive atmosphere are now well-recognized and its linkages with efficiency and growth can be demonstrable in many instances. However, the growth scenario in the corporate sector of Pakistan reflects a dismal picture despite the SECs improvements in registration procedures, facilitation through website and introduction of single member companies.


In view of the above, this study was envisioned to ascertain why the response from SMEs was not encouraging and to evaluate as to what to be done to boost the SMEs corporatization. It was structured and designed to; highlight the issues relating to incorporation process at SEC, review the existing legal and policy framework provided for SME’s, identify the fiscal and non-fiscal barriers, develop a policy framework for the SEC to facilitate corporatization of SME’s and to devise a promotional strategy for their awareness development.


The reports prepared under the study namely the “Legal and Regulatory Framework for Corporatization of SMEs” and “Fiscal and Non-Fiscal Barriers to SME Growth, CRO and SECP Services and the Relevant Policy Framework” have recommended an action plan for what needs to be done, in the various sectors, to facilitate SME growth and incorporation. Certain actions require the SEC’s direct initiative to affect the changes itself, focusing on CRO front.  Indeed, while the SEC is proud of its regulatory system and the work we do to maintain and constantly improve upon; I acknowledge that we don’t have all the answers. We are anxious to listen to, improve upon, and seek to advance a constructive dialogue with all the stakeholders to maintain a strong and vibrant corporate sector. In the same vein, we have evaluated the measures recommended for the CRO front and have implemented the reforms wherever needed.


I would like to mention that our CROs remain practically open for the public from 8:30 a.m. to 5:30 p.m. and filling is not rejected at any time. Facilitation officers have been designated at CROs and training in this regard is in process. Procedure for complaint redressal has been developed and the complaint/ suggestion boxes are placed therein. All delays on CROs part are regularly monitored. Further, to provide greater accessibility to the corporate information an amendment has been notified in the Sixth Schedule to the Companies Ordinance, 1984 that would enable the public at large to obtain the compiled corporate data and information on payment of nominal fees. Model; memorandum for almost 14 sectors developed and placed on SEC website alongwith the statutory forms.


Moreover, realizing the significance of awareness generation and ownership within the SECP workshops for the officers of eight CROs were conducted at Karachi and Lahore to share the finding of the research study and to develop internal familiarization with the SMEs corporatization concept. To implement a strategy to market the SEC led reforms in the corporate sector we have devised a strategy to hold a series of seminars and dialogues with the various chambers, trade, retail and manufacturers associations. I personally had meetings with the chamber of commerce and industry at Sialkot, Sarhad and Faisalabad and a plan for the few more is also scheduled.


The study has also identified several policy initiatives where SEC can play a role by initiating a dialogue with the relevant agencies for action. We fully endorse the recommendations of the study regarding the initiatives: (a) to develop an overall and comprehensive policy for the development of the SME sector; and (b) in view of the findings of such a policy, the exploration of having a single law for SMEs, which caters to their specific requirements and conditions. SEC has shared the findings with Small & Medium Enterprise Development Authority (SMEDA) and would initiate the negotiations shortly. Recommendations for financial reforms to diffuse the mandatory taking the personal guarantees from SMEs have been shared with SBP and we are hopeful to evolve a solution in collaboration with SBP.  Further, it is mentioned that SEC has also focused on the pressing issue of excessive tax burden on corporate entities as an impediment to corporatization and has constituted a task force in collaboration with the CBR to develop a corporate tax policy that would encourage corporatization and develop a progressive corporate sector.



The SEC is committed to continue its efforts for corporate sector development and growth and to facilitate the public in this regard. To that end, we want to work with you, and answer your questions, as the implementation process continues. Indeed, gatherings like this one are an important part of the dialogue that must continue between SEC professionals and the corporate sector. I want to thank again the Ministry of Industries and look forward to continuing our constructive working relationship for the benefit of the industry, the Commission, and, most importantly, the corporate sector.

Thank you.

State of SMEs in Pakistan

State of SMEs in Pakistan


In the industrial development of a country the importance of the SME sector cannot be overemphasized. SMEs constitute nearly 90% of all the enterprises in Pakistan; employ 80% of the non-agricultural labour force; and their share in the annual GDP is 40%, approximately. However, unlike large enterprises in the formal sector, a small and medium enterprise is constrained by financial and other resources. This inherent characteristic of an SME makes it imperative that there should be a mechanism through which it may get support in different functions of business including technical upgradation, marketing, financial and human resource training & development.SMEDA is the flagship organization of Pakistan which is providing the necessary services to help SMEs overcome the weaknesses that are endogenous to their very nature. It is an autonomous body working under the umbrella of the Ministry of Industries & Production and contributes towards the growth and development of SMEs in Pakistan through:

(i) the creation of a conducive and enabling regulatory environment;
(ii) development of industrial clusters;
(iii) and the provision of Business Development Services to SMEs in all areas of business management.

Adhering to a clear mandate and a logical path to achieve quantitatively verifiable targets, SMEDA carries out comprehensive analyses of international trends, national policies and other macroeconomic factors affecting SMEs in Pakistan for a gradual progress towards the creation of a favourable business environment for its key clients – the SMEs of Pakistan. At the same time, we also interact with the SMEs working in industrial sectors such as Agriculture, Fisheries, Textiles, Handloom Weaving, Transport, Leather, Marble & Granite, Carpets and Light Engineering. This interaction takes place at the individual as well as collective level to provide proactive and responsive financial, technical, management and marketing services to SMEs.

At the collective level SMEDA addresses the problems and needs of SMEs in the form of an industrial cluster – a concentration of largely homogenous enterprises within a certain geographical area. SMEDA interacts with the stakeholders operating in such clusters on a regular basis and collects first hand information about their problems and needs. During this interaction, the issues are prioritized and the important problems are selected for detailed working through which the projects/programs are identified.
SME support through cluster development program is provided on two fronts:
1. Regulations and policy level support
2. Institutional & networking support

In the policy level support, problems related to any Government department or Government policy/regulation are studied and, if found valid, are advocated with the concerned authorities. At the institutional level, SMEDA provides support to SMEs by creating networking amongst the concerned stakeholders or by directly starting development projects in the clusters. Such projects may include establishing a training institute, building a common facility centre, building a model plant with state-of-the-art technology for SMEs to emulate through reverse engineering. These projects also include upgrading technology in a particular industrial sector and starting a program-lending scheme for this purpose in collaboration with the financial institutions.

Up to now, SMEDA has been involved in cluster development projects in the areas of Boat Modification in Marine Fishery Sector, Credit for Auto Vendors, Carpet Weaving, Marble & Granite, Dates & Apples Processing, Wooden Furniture, Leather Garments, Ceramic Kilns, Cotton Ginning, and Glass Bangles Cluster.
Some of the important cluster development projects undertaken by SMEDA are:

1. Ginning Technology Up-Gradation
2. Program Lending For Power Looms
3. Computer Aided Design Centre (Common Facility Centre-Sialkot)
4. Designing Institute for Garments (Peshawar)
5. Accessories Sector Study
6. Development of Handloom Cluster

Horticulture/Fruits and Vegetables
7. Establishment of Cool-Chain Agriculture Export Processing Zone
8. Fruit Processing Facility (NWFP in Collaboration with EPB)
9. Assistance to Set Up Horticulture Export Board
10. Revitalisation of Sunflo Cit-Russ for Citrus Cluster Development.
11. Apple Treatment Plant in Balochistan (Co-Ordination with EPB)

12. Program Lending Boat/Engine Modification, Gwadar District
13. Establishment Of Shrimp Farms
14. Fish Processing Facility In Gwadar (Feasibility Study)
Granite & Marble
15. Export Warehouse Marble (Azakhel NWFP)
16. Establishment of Model Quarry and Training Institute Marble
17. Joint Ventures and Technology Transfer Arrangements (NWFP)

18. Five New Gem Mines To Be Operationalized (NWFP)
19. Lapidaries Program Lending (NWFP)
20. Glass & Ceramics
21. Ceramics Kiln Up-Gradation: Common Facility Centre, Gujrat
22. Sanitary Ware & Pottery Sector Kiln Up-Gradation
23. Bangles Kiln Up-Gradation (Hyderabad)

24. Agri-Mall – One Stop Shop for Agriculture Inputs
25. Support Services for Agricultural Credit (SSAC)
26. Establishment of 3 Private Sector Warehousing & Trade Promotion Facilities in Afghanistan

The third area of SMEDA’s functioning is the provision of Business Development Services to SMEs. For this purpose we have set up HelpDesks in all four of our regional offices where any SME in need of SMEDA’s services can simply walk in and obtain over the counter products such as Project Briefs, Pre-feasibility Studies and Regulatory Procedures, along with advice on specific problems. SMEDA HelpDesk Services include:
Assistance in Raising Finance.
Financial Advice.
Project Identification.
Business Plan Development.
Technical Advice.
Marketing Advice (Branding, Labelling, Packaging, Distribution, Promotion, etc.)
Company Incorporation, Export Registration, & Regulatory Advice.
Sales Tax, Custom Duty, Excise Duty, etc.
Electronic Commerce Support.
Business Matchmaking.
Accounting & Bookkeeping Services.
Information Services (Library, Databases, Project Briefs, Pre-feasibility Studies, Business Guidebooks).

As a part of its Business Development Services, SMEDA also provides Human Resource Training services by conducting extensive training need analysis of different SME clusters. SMEDA has so far conducted more than 230 training courses and workshops focussing on developing sector specific skills.

SMEDA, envisions to become a model of public-private partnership for better facilitation of the small & medium enterprises in Pakistan through the creation of a more equitable, transparent and conducive regulatory environment for the businessmen. SMEDA believes in synthesizing home-grown solutions to the problems of SMEs, based on global information and local wisdom achieved through cross-country analysis, experience of indigenous entrepreneurs and constraints of the government.

SME Definitions

SME Definitions
SMEDA SME Definition (proposed under SME act)
Tax ordnance 2005 defines Small business with an equity of up to Rs 25 million and turnover of Rs 200 million.
An SME entity is defined as a business with an investment in productive assets
(not including land and building) ranging between Rs. 2-40 million and employing between 10-99 workers.
Small: between 10-35 employees and productive assets range of Rs. 2-20 million.
Medium: between 36-99 employees and productive assets range to Rs. 20-40 million).For detailed information on SMEs and the proposed SME Policy, kindly visit Definitions used by various institutions in Pakistan

Institution Small Medium
SME Bank Total Assets of Rs. 20 million Total Assets of Rs. 100 million
Federal Bureau of Statistics Less than 10 employees N/A
Punjab Small Industries Corporation Fixed investment. up to Rs. 20 million excluding land and building N/A
Punjab Industries Department Fixed assets with Rs. 10 million excluding cost of land
Sindh Industries Department Entity engaged in handicrafts or manufacturing of consumer or producer goods with fixed capital investment up to Rs.10 million including land & building
State Bank of Pakistan (SME Prudential Regulations) An entity , ideally not being a public limited company, which does not employee more than 250 persons ( manufacturing) and 50 persons (trade / services)   and also fulfills one of the following criteria:
(i) A trade / services concern with total assets at cost excluding land and buildings up to Rs 50 million.
(ii) A manufacturing concern with total assets at cost excluding land and building up to Rs 100 million.
(iii) Any concern (trade, services or manufacturing) with net sales not exceeding Rs 300 million as per latest financial statements.

SME Definitions in selected Asia Pacific Economic Cooperation (APEC) member countries
Enterprises exporting up to US$2.5 Million a year are considered Small by the State Bank of Pakistan

Country Sector Employment Other Measures
Australia Manufacturing Less than 100 employees
Services Less than 20 employees
Canada Manufacturing Less than 500 employees
Services Less than 50 employees
China Varies with Industry Usually less than 100 Employees
Indonesia Less than 100 employees
Japan* Manufacturing Less than 300 employees ¥100 million assets
Wholesaling Less than 100 employees ¥30 million assets
Retailing-Services Less than 50 employees ¥10 million assets
Korea Manufacturing Less than 300 employees
Services Less than 20 employees
Malaysia Varies (for SMI) Less than 75 employees (Different for Bumiputra Enterprises) Less than RM 2.5 million
Philippines Less than 200 employees P 40 million assets
Singapore Manufacturing less than S$12 million fixed assets
Services Less than 100 employees
USA Less than 500 employees

Source: Hall (1995); for Japan*, Witton (1999), SME Policy in Thailand: Vision and Challenges-
Ramon C. Sevilla and Kusol Soonthornthada


21. Small and Medium Enterprise (SME) means an entity, ideally not a public

limited company, which does not employ more than 250 persons (if it is

manufacturing / service concern) and 50 persons (if it is trading concern)

and also fulfills the following criteria of either ‘a’ and ‘c’ or ‘b’ and ‘c’ as


(a) A trading / service concern with total assets at cost excluding land and

building upto Rs 50 million.


(b) A manufacturing concern with total assets at cost excluding land and

building upto Rs 100 million.

(c) Any concern (trading, service or manufacturing) with net sales not

exceeding Rs 300 million as per latest financial statements.

An Individual, if he or she meets the above criteria, can also be categorized

as an SME. (SBP Prudential Regulations)


The category of micro, small and medium-sized enterprises (SMEs) is made up of enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding EUR 50 million, and/or an annual balance sheet total not exceeding EUR 43 million

Source: European Commission, Recommendation of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises


Boosting Competitiveness and Profitability of Pakistan’s SME Sector

Boosting Competitiveness and Profitability of Pakistan’s SME Sector


MANILA, PHILIPPINES (19 December 2003) – The Asian Development Bank (ADB) is helping to boost the competitiveness and profitability of Pakistan’s small and medium enterprises (SMEs) to promote economic growth, through an assistance package approved today including US$170 million in loans and a partial credit guarantee (PCG).

The Sector Development Program will support Government policy reforms on SMEs to improve the business climate, emphasizing leveraging private sector involvement. It will also help build better services to SMEs from financial institutions and business development services (BDS).

The program comprises four parts:

  • A program loan of $152 million to support policy reforms
  • A project loan of $18 million equivalent to build institutions and markets for BDS and credit for SMEs. This will support implementation of the policy and institutional reforms designed under the program loan
  • The PCG facility, of up to $65 million, to leverage market-based credit to SMEs
  • A technical assistance (TA) grant of $250,000 to assist the Government and private sector stakeholders in coordinating reforms.

About 30,000 SMEs will benefit from access to financial services and 8,000 from the operations of the private sector-managed Business Support Fund, which will be set up to serve as a knowledge tool to enhance the productivity and competitiveness of SMEs.

“The program aims to fill an important gap in the Government’s and ADB’s strategic agenda, given that lack of access to formal sources of finance and BDS are big constraints on SME growth,” says Rainer Hartel, an ADB Financial Sector Specialist.

The Government recently affirmed the importance of SMEs and their potential for economic growth, employment, and income generation in its Poverty Reduction Strategy paper.

SMEs are officially classed in Pakistan as units employing between 10 and 100 staff. Under this definition, there are about 80,000 SMEs in the country, most concentrating on trade and services. However the true significance of SMEs is much higher taking into account the SMEs operating in the informal sector each employing between 5 and 10 staff. SMEs account for about 80% of urban jobs and 30% of the country’s gross domestic product.

However, despite their importance, policies and laws favor larger businesses and are mostly outdated and inaccessible to the vast majority of SME owners.

Preparatory work for the project identified SME needs as being highly diversified, including practical and strategic business advice, financing, marketing, and technology upgrading.

Under the program, a task force will be established to develop an SME policy paper and provide the background analysis and basis for improving the policy environment. To increase understanding of labor protection and its positive impact on enterprise efficiency, a national labor protection and labor inspection policies will also be developed. In addition, the program will enhance the effectiveness and outreach to SMEs of the country’s Small and Medium Enterprise Development Authority.

The program will improve market-based access to, and delivery of, SME finance, including the regulatory and credit information infrastructure. It will build capacity among private sector financial institutions for SME finance, restructuring and privatizing the SME Bank.

“The enhanced business development and financial services will improve SME competitiveness and profitability, and help boost job security and creation,” adds Mr. Hartel.

The PCG facility will be used to leverage the financial system’s resources for lending to the SME segment currently underserved by financial institutions. This will provide catalytic support for innovative financial products and approaches in new and less familiar markets. ADB will share with participating financial institutions the credit risk of SME loans.

Once successfully tested among participating financial institutions, such products will be expanded among a larger number of financial institutions. The PCG facility will be available for five years until about end-2008.

The program loan comes from ADB’s ordinary capital resources, with a 15-year term, including a grace period of three years. Interest is determined in accordance with ADB’s LIBOR-based lending facility.

The project loan comes from ADB’s concessional Asian Development Fund, with a 32-year term, including a grace period of eight years. Interest is 1% per year during the grace period and 1.5% per year afterwards.

The program will be implemented over a three-year period and the project will be implemented over five years.

The Ministry of Finance will be the executing agency for the loans and will also constitute the core program management unit in charge of monitoring and program coordination. The project loan will be largely implemented by a private sector-led SME Business Support Fund Company providing BDS and participating financial institutions benefiting from capacity building support. The executing agencies for the PCG facility will be the participating financial institutions, which will be identified through a due diligence process.

Documents to be delivered to registrar by foreign companies in Pakistan

Under Section 451 of Companies Ordinance, 1984. following documents need to be delivered to registrar by foreign companies.-

(1) Every foreign company which, after the commencement of this Ordinance, establishes

a place of business in Pakistan shall, within thirty days of the establishment of the place of

business, deliver to the registrar-

(a) a certified copy of the charter, statute or memorandum and articles of the

company, or other instrument constituting or defining the constitution of

the company, and if the instrument is not written in the English or Urdu

language, a certified translation thereof in the English or Urdu language;

(b) the full address of the registered or principal office of the company;

(c) a list of the directors, chief executive and secretaries (if any) of the


(d) a return showing the full present and former names and surnames,

father’s name or, in the case of a married woman or widow, the name of

her husband or deceased husband, present and former nationality,

designation and full address in Pakistan of the principal officer of the

company in Pakistan by whatever name called;

Good to Great Fast Company by Jim Collins

Good to Great

Fast Company

by Jim Collins

Start with 1,435 good companies. Examine their performance over 40 years. Find the 11 companies that became great. Now here’s how you can do it too. Lessons on eggs, flywheels, hedgehogs, buses, and other essentials of business that can help you transform your company.

I want to give you a lobotomy about change. I want you to forget everything you’ve ever learned about what it takes to create great results. I want you to realize that nearly all operating prescriptions for creating large-scale corporate change are nothing but myths.

The Myth of the Change Program: This approach comes with the launch event, the tag line, and the cascading activities.

The Myth of the Burning Platform: This one says that change starts only when there’s a crisis that persuades “unmotivated” employees to accept the need for change.

The Myth of Stock Options: Stock options, high salaries, and bonuses are incentives that grease the wheels of change.

The Myth of Fear-Driven Change: The fear of being left behind, the fear of watching others win, the fear of presiding over monumental failure—all are drivers of change, we’re told.

The Myth of Acquisitions: You can buy your way to growth, so it figures that you can buy your way to greatness.

The Myth of Technology-Driven Change: The breakthrough that you’re looking for can be achieved by using technology to leapfrog the competition.

The Myth of Revolution: Big change has to be wrenching, extreme, painful—one big, discontinuous, shattering break.

Wrong. Wrong. Wrong. Wrong. Wrong. Wrong. Totally wrong.

Here are the facts of life about these and other change myths. Companies that make the change from good to great have no name for their transformation—and absolutely no program. They neither rant nor rave about a crisis—and they don’t manufacture one where none exists. They don’t “motivate” people—their people are self-motivated. There’s no evidence of a connection between money and change mastery. And fear doesn’t drive change—but it does perpetuate mediocrity. Nor can acquisitions provide a stimulus for greatness: Two mediocrities never make one great company. Technology is certainly important—but it comes into play only after change has already begun. And as for the final myth, dramatic results do not come from dramatic process—not if you want them to last, anyway. A serious revolution, one that feels like a revolution to those going through it, is highly unlikely to bring about a sustainable leap from being good to being great.

These myths became clear as my research team and I completed a five-year project to determine what it takes to change a good company into a great one. We systematically scoured a list of 1,435 established companies to find every extraordinary case that made a leap from no-better-than-average results to great results. How great? After the leap, a company had to generate cumulative stock returns that exceeded the general stock market by at least three times over 15 years—and it had to be a leap independent of its industry. In fact, the 11 good-to-great companies that we found averaged returns 6.9 times greater than the market’s—more than twice the performance rate of General Electric under the legendary Jack Welch.

The surprising good-to-great list included such unheralded companies as Abbott Laboratories (3.98 times the market), Fannie Mae (7.56 times the market), Kimberly-Clark Corp.(3.42 times the market), Nucor Corp. (5.16 times the market), and Wells Fargo (3.99 times the market). One such surprise, the Kroger Co.—a grocery chain—bumped along as a totally average performer for 80 years and then somehow broke free of its mediocrity to beat the stock market by 4.16 times over the next 15 years. And it didn’t stop there. From 1973 to 1998, Kroger outperformed the market by 10 times.

In each of these dramatic, remarkable, good-to-great corporate transformations, we found the same thing: There was no miracle moment. Instead, a down-to-earth, pragmatic, committed-to-excellence process—a framework—kept each company, its leaders, and its people on track for the long haul. In each case, it was the triumph of the Flywheel Effect over the Doom Loop, the victory of steadfast discipline over the quick fix. And the real kicker: The comparison companies in our study—firms with virtually identical opportunities during the pivotal years—did buy into the change myths described above—and failed to make the leap from good to great.

How change doesn’t happen

Picture an egg. Day after day, it sits there. No one pays attention to it. No one notices it. Certainly no one takes a picture of it or puts it on the cover of a celebrity-focused business magazine. Then one day, the shell cracks and out jumps a chicken.

All of a sudden, the major magazines and newspapers jump on the story: “Stunning Turnaround at Egg!” and “The Chick Who Led the Breakthrough at Egg!” From the outside, the story always reads like an overnight sensation—as if the egg had suddenly and radically altered itself into a chicken.

Now picture the egg from the chicken’s point of view.

While the outside world was ignoring this seemingly dormant egg, the chicken within was evolving, growing, developing—changing. From the chicken’s point of view, the moment of breakthrough, of cracking the egg, was simply one more step in a long chain of steps that had led to that moment. Granted, it was a big step—but it was hardly the radical transformation that it looked like from the outside.

It’s a silly analogy, but then our conventional way of looking at change is no less silly. Everyone looks for the “miracle moment” when “change happens.” But ask the good-to-great executives when change happened. They cannot pinpoint a single key event that exemplified their successful transition.

Take Walgreens. For more than 40 years, Walgreens was no more than an average company, tracking the general market. Then in 1975 (out of the blue!) Walgreens began to climb. And climb. And climb. It just kept climbing. From December 31, 1975, to January 1, 2000, $1 invested in Walgreens beat $1 invested in Intel by nearly two times, General Electric by nearly five times, and Coca-Cola by nearly eight times. It beat the general stock market by more than 15 times.

I asked a key Walgreens executive to pinpoint when the good-to-great transformation happened. His answer: “Sometime between 1971 and 1980.” (Well, that certainly narrows it down!)

Walgreens’s experience is the norm for good-to-great performers. Leaders at Abbott said, “It wasn’t a blinding flash or sudden revelation from above.” From Kimberly-Clark: “These things don’t happen overnight. They grow.” From Wells Fargo: “It wasn’t a single switch that was thrown at one time.”

We keep looking for change in the wrong places, asking the wrong questions, and making the wrong assumptions. There’s even a tendency to blame Wall Street for the “instant results” approach to change. But the companies that made the jump from good to great did so using Wall Street’s own tough metric of success: a sustained leap in their stock-market performance. Wall Street turns out to be just another myth—an excuse for not doing what really works. The data doesn’t lie.

How change does happen

Now picture a huge, heavy flywheel. It’s a massive, metal disk mounted horizontally on an axle. It’s about 100 feet in diameter, 10 feet thick, and it weighs about 25 tons. That flywheel is your company. Your job is to get that flywheel to move as fast as possible, because momentum—mass times velocity—is what will generate superior economic results over time.

Right now, the flywheel is at a standstill. To get it moving, you make a tremendous effort. You push with all your might, and finally you get the flywheel to inch forward. After two or three days of sustained effort, you get the flywheel to complete one entire turn. You keep pushing, and the flywheel begins to move a bit faster. It takes a lot of work, but at last the flywheel makes a second rotation. You keep pushing steadily. It makes three turns, four turns, five, six. With each turn, it moves faster, and then—at some point, you can’’t say exactly when—you break through. The momentum of the heavy wheel kicks in your favor. It spins faster and faster, with its own weight propelling it. You aren’t pushing any harder, but the flywheel is accelerating, its momentum building, its speed increasing.

This is the Flywheel Effect. It’s what it feels like when you’re inside a company that makes the transition from good to great. Take Kroger, for example. How do you get a company with more than 50,000 people to embrace a new strategy that will eventually change every aspect of every grocery store? You don’t. At least not with one big change program.

Instead, you put your shoulder to the flywheel. That’s what Jim Herring, the leader who initiated the transformation of Kroger, told us. He stayed away from change programs and motivational stunts. He and his team began turning the flywheel gradually, consistently—building tangible evidence that their plans made sense and would deliver results.

“We presented what we were doing in such a way that people saw our accomplishments,”Herring says. “We tried to bring our plans to successful conclusions step by step, so that the mass of people would gain confidence from the successes, not just the words.”

Think about it for one minute. Why do most overhyped change programs ultimately fail? Because they lack accountability, they fail to achieve credibility, and they have no authenticity. It’s the opposite of the Flywheel Effect; it’s the Doom Loop.

Companies that fall into the Doom Loop genuinely want to effect change—but they lack the quiet discipline that produces the Flywheel Effect. Instead, they launch change programs with huge fanfare, hoping to “enlist the troops.” They start down one path, only to change direction. After years of lurching back and forth, these companies discover that they’ve failed to build any sustained momentum. Instead of turning the flywheel, they’ve fallen into a Doom Loop: Disappointing results lead to reaction without understanding, which leads to a new direction—a new leader, a new program—which leads to no momentum, which leads to disappointing results. It’s a steady, downward spiral. Those who have experienced a Doom Loop know how it drains the spirit right out of a company.

Consider the Warner-Lambert Co.—the company that we compared directly with Gillette—in the early 1980s. In 1979, Warner-Lambert told Business Week that it aimed to be a leading consumer-products company. One year later, it did an abrupt about-face and turned its sights on healthcare. In 1981, the company reversed course again and returned to diversification and consumer goods. Then in 1987, Warner-Lambert made another U-turn, away from consumer goods, and announced that it wanted to compete with Merck. Then in the early 1990s, the company responded to government announcements of pending healthcare reform and reembraced diversification and consumer brands.

Between 1979 and 1998, Warner-Lambert underwent three major restructurings—one per CEO. Each new CEO arrived with his own program; each CEO halted the momentum of his predecessor. With each turn of the Doom Loop, the company spiraled further downward, until it was swallowed by Pfizer in 2000.

In contrast, why does the Flywheel Effect work? Because more than anything else, real people in real companies want to be part of a winning team. They want to contribute to producing real results. They want to feel the excitement and the satisfaction of being part of something that just flat-out works. When people begin to feel the magic of momentum—when they begin to see tangible results and can feel the flywheel start to build speed—that’s when they line up, throw their shoulders to the wheel, and push.

And that’s how change really happens.

Disciplined people: “Who” before “what”

You are a bus driver. The bus, your company, is at a standstill, and it’s your job to get it going. You have to decide where you’re going, how you’re going to get there, and who’s going with you.

Most people assume that great bus drivers (read: business leaders) immediately start the journey by announcing to the people on the bus where they’re going—by setting a new direction or by articulating a fresh corporate vision.

In fact, leaders of companies that go from good to great start not with “where” but with “who.” They start by getting the right people on the bus, the wrong people off the bus, and the right people in the right seats. And they stick with that discipline—first the people, then the direction—no matter how dire the circumstances. Take David Maxwell’s bus ride. When he became CEO of Fannie Mae in 1981, the company was losing $1 million every business day, with $56 billion worth of mortgage loans underwater. The board desperately wanted to know what Maxwell was going to do to rescue the company.

Maxwell responded to the “what” question the same way that all good-to-great leaders do: He told them, That’s the wrong first question. To decide where to drive the bus before you have the right people on the bus, and the wrong people off the bus, is absolutely the wrong approach.

Maxwell told his management team that there would only be seats on the bus for A-level people who were willing to put out A-plus effort. He interviewed every member of the team. He told them all the same thing: It was going to be a tough ride, a very demanding trip. If they didn’t want to go, fine; just say so. Now’s the time to get off the bus, he said. No questions asked, no recriminations. In all, 14 of 26 executives got off the bus. They were replaced by some of the best, smartest, and hardest-working executives in the world of finance.

With the right people on the bus, in the right seats, Maxwell then turned his full attention to the “what” question. He and his team took Fannie Mae from losing $1 million a day at the start of his tenure to earning $4 million a day at the end. Even after Maxwell left in 1991, his great team continued to drive the flywheel—turn upon turn—and Fannie Mae generated cumulative stock returns nearly eight times better than the general market from 1984 to 1999.

When it comes to getting started, good-to-great leaders understand three simple truths. First, if you begin with “who,” you can more easily adapt to a fast-changing world. If people get on your bus because of where they think it’s going, you’ll be in trouble when you get 10 miles down the road and discover that you need to change direction because the world has changed. But if people board the bus principally because of all the other great people on the bus, you’ll be much faster and smarter in responding to changing conditions. Second, if you have the right people on your bus, you don’t need to worry about motivating them. The right people are self-motivated: Nothing beats being part of a team that is expected to produce great results. And third, if you have the wrong people on the bus, nothing else matters. You may be headed in the right direction, but you still won’t achieve greatness. Great vision with mediocre people still produces mediocre results.

Disciplined thought: Fox or hedgehog?

Picture two animals: a fox and a hedgehog. Which are you? An ancient Greek parable distinguishes between foxes, which know many small things, and hedgehogs, which know one big thing. All good-to-great leaders, it turns out, are hedgehogs. They know how to simplify a complex world into a single, organizing idea—the kind of basic principle that unifies, organizes, and guides all decisions. That’s not to say hedgehogs are simplistic. Like great thinkers, who take complexities and boil them down into simple, yet profound, ideas (Adam Smith and the invisible hand, Darwin and evolution), leaders of good-to-great companies develop a Hedgehog Concept that is simple but that reflects penetrating insight and deep understanding.

What does it take to come up with a Hedgehog Concept for your company? Start by confronting the brutal facts. One good-to-great CEO began by asking, “Why have we sucked for 100 years?” That’s brutal—and it’s precisely the type of disciplined question necessary to ignite a transformation. The management climate during a leap from good to great is like a searing scientific debate—with smart, tough-minded people examining hard facts and debating what those facts mean. The point isn’t to win the debate, but rather to come up with the best answers—and, ultimately, to lock onto a Hedgehog Concept that works.

You’ll know that you’re getting closer to your Hedgehog Concept when you align three intersecting circles that represent three pivotal questions: What can we be the best in the world at? (And equally important—what can we not be the best at?) What is the economic denominator that best drives our economic engine (profit or cash flow per “x”)? And what are our core people deeply passionate about? Answer those three questions honestly, facing the brutal facts without blinking, and you’ll begin to see your Hedgehog Concept emerge.

For example, before Wells Fargo understood its Hedgehog Concept, its leaders had tried to make it a global bank: It operated like a mini-Citicorp—and a mediocre one at that.

Then the Wells Fargo team asked itself, “What can we potentially do better than any other company?” The brutal fact was that Wells Fargo would never be the best global bank in the world—and so the leadership team pulled the plug on the vast majority of the bank’s international operations. When the team asked the question about the bank’s economic engine, Wells Fargo’s leaders confronted a second brutal fact: In a deregulated world, commercial banking would be a commodity. The essential economic driver would no longer be profit per loan, but profit per employee. The bank switched its operations to become a pioneering leader in electronic banking and to open utilitarian branches run by small crews of superb people. Profit per employee skyrocketed. Finally, when it came to passion, members of the Wells Fargo team all agreed: The mindless waste and self-awarded perks of traditional banking culture were revolting. They proudly saw themselves as stoic Spartans in an industry that had been dominated by the wasteful, elitist culture of banking. The Wells Fargo team eventually translated the three circles into a simple, crystalline Hedgehog Concept: Run a bank like a business, with a focus on the western United States, and consistently increase profit per employee. “Run it like a business” and “run it like you own it” became mantras; simplicity and focus made all the difference. With fanatical adherence to that simple idea, Wells Fargo made the leap from good results to superior results.

In the journey from good to great, defining your Hedgehog Concept is an essential element. But insight and understanding don’t happen overnight—or after one off-site. On average, it took four years for the good-to-great companies to crystallize their Hedgehog Concepts. It was an inherently iterative process—consisting of piercing questions, vigorous debate, resolute action, and autopsies without blame—a cycle repeated over and over by the right people, infused with the brutal facts, and guided by the three circles. This is the chicken inside the egg.

Disciplined action: The “stop doing” list

Take a look at your desk. If you’re like most hard-charging leaders, you’ve got a well-articulated to-do list. Now take another look: Where’s your stop-doing list? We’ve all been told that leaders make things happen—and that’s true: Pushing that flywheel takes a lot of concerted effort. But it’s also true that good-to-great leaders distinguish themselves by their unyielding discipline to stop doing anything and everything that doesn’t fit tightly within their Hedgehog Concept.

When Darwin Smith and his management team crystallized the Hedgehog Concept for Kimberly-Clark, they faced a dilemma. On one hand, they understood that the best path to greatness lay in the consumer business, where the company had demonstrated a best-in-the-world capability in its building of the Kleenex brand. On the other hand, the vast majority of Kimberly-Clark’s revenue lay in traditional coated-paper mills, turning out paper for magazines and writing pads—which had been the core business of the company for 100 years. Even the company’s namesake town—Kimberly, Wisconsin—was built around a Kimberly-Clark paper mill.

Yet the brutal truth remained: The consumer business was the one arena that best met the three-circle test. If Kimberly-Clark remained principally a paper-mill business, it would retain a secure position as a good company. But its only shot at becoming a great company was to become the best paper-based consumer company—if it could take on such companies as Procter & Gamble and Scott Paper Co. and beat them. That meant it would have to “stop doing” paper mills.

So, in what one director called “the gutsiest decision I’ve ever seen a CEO make,” Darwin Smith sold the mills. He even sold the mill in Kimberly, Wisconsin. Then he threw all the money into a war chest for an epic battle with Procter & Gamble and Scott Paper. Wall Street analysts derided the move, and the business press called it stupid. But Smith did not waver.

Twenty-five years later, Kimberly-Clark emerged from the fray as the number-one paper-based consumer-products company in the world, beating P&G in six of eight categories and owning its former archrival Scott Paper outright. For the shareholder, Kimberly-Clark under Darwin Smith beat the market by four times, easily outperforming such great companies as Coca-Cola, General Electric, Hewlett-Packard, and 3M.

In deciding what not to do, Smith gave the flywheel a gigantic push—but it was only one push. After selling the mills, Kimberly-Clark’s full transformation required thousands of additional pushes, big and small, accumulated one after another. It took years to gain enough momentum for the press to herald Kimberly-Clark’s shift from good to great. One magazine wrote, “When … Kimberly-Clark decided to go head to head against P&G … this magazine predicted disaster. What a dumb idea. As it turns out, it wasn’t a dumb idea. It was a smart idea.” The amount of time between the two articles: 21 years.

Now it begins

Our study of what it takes to turn good into great required five years—and 10.5 person-years—and amounted to our own flywheel effort. Looking back on our research, what’s most striking to me about our findings is the absence of a magic moment in any of the good-to-great companies—or in our own journey to understanding. The real path to greatness, it turns out, requires simplicity and diligence. It requires clarity, not instant illumination. It demands each of us to focus on what is vital—and to eliminate all of the extraneous distractions.

After five years of research, I’m absolutely convinced that if we just focus our attention on the right things—and stop doing the senseless things that consume so much time and energy—we can create a powerful Flywheel Effect without increasing the number of hours we work.

I’m also convinced that the good-to-great findings apply broadly—not just to CEOs but also to you and me in whatever work we’re engaged in, including the work of our own lives. For many people, the first question that occurs is, “But how do I persuade my CEO to get it?” My answer: Don’t worry about that. Focus instead on results—on subverting mediocrity by creating a Flywheel Effect within your own span of responsibility. So long as we can choose the people we want to put on our own minibus, each of us can create a pocket of greatness. Each of us can take our own area of work and influence and can concentrate on moving it from good to great. It doesn’t really matter whether all the CEOs get it. It only matters that you and I do. Now, it’s time to get to work.

Jim Collins wrote the essay “Built to Flip” in the March 2000 issue of Fast Company. His new book, Good to Great: Why Some Companies Make the Leap … And Others Don’t, will be available in October.

Sidebar: Separating the good from the great

Can a good company become a great company? How? It took Jim Collins and his team of researchers five years to come up with the answers: 11 companies made the leap from good to great and then sustained those results for at least 15 years. How great was great? The good-to-great companies averaged cumulative stock returns 6.9 times the general market in the 15 years after their transition points. The actual screening-and-selection process was a rigorous one. The criteria were:

1. The company had to show a pattern of good performance, punctuated by a transition point, after which it shifted to great performance. “Great performance” was defined as a cumulative total stock return of at least three times the general market for the period from the transition point through 15 years.

2. The transition from good to great had to be company specific, not an industrywide event.

3. The company had to be an established and ongoing enterprise—not a startup. It had to have been in business for at least 25 years prior to its transition, and it had to have been publicly traded with stock-return data available for at least 10 years prior to its transition.

4. The transition point had to occur before 1985 to give the team enough data to assess the sustainability of the transition.

5. Whatever the year of transition, the company had to be a significant, ongoing, stand-alone company.

6. At the time of its selection, the company still had to show an upward trend.

The study began with a field of 1,435 companies and emerged with a list of 11 good-to-great companies: Abbott Laboratories, Circuit City, Fannie Mae, Gillette Co., Kimberly-Clark Corp., the Kroger Co., Nucor Corp., Philip Morris Cos. Inc., Pitney Bowes Inc., Walgreens, and Wells Fargo.

The next step in the study was to isolate what it took to make the change. At this point, each of the 11 good-to-great companies was paired with a comparison company—a company with similar attributes that could have made the transition, but didn’t.

Then the research began. Collins and his team reviewed books, articles, case studies, and annual reports covering each company; examined financial analyses for each company, totaling 980 combined years of data; conducted 84 interviews with senior managers and board members of the companies; scrutinized the personal and professional records of 56 CEOs; analyzed compensation plans for the companies; and reviewed layoffs, corporate ownership, “media hype,” and the role of technology for the companies. The findings are contained in Good to Great: Why Some Companies Make the Leap … And Others Don’t (HarperBusiness, 2001).

Sidebar: Great answers to good questions


Fast Company:

The CEOs who took their companies from good to great were largely anonymous. Is that an accident?

Jim Collins: There is a direct relationship between the absence of celebrity and the presence of good-to-great results. Why? First, when you have a celebrity, the company turns into “the one genius with 1,000 helpers.” It creates a sense that the whole thing is really about the CEO. At a deeper level, we found that for leaders to make something great, their ambition has to be for the greatness of the work and the company, rather than for themselves. That doesn’t mean that they don’t have an ego. It means that at each decision point—at each of the critical junctures when Choice A would favor their ego and Choice B would favor the company and the work—time and again the good-to-great leaders pick Choice B. Celebrity CEOs, at those same decision points, are more likely to favor self and ego over company and work.

FC: Like the anonymous CEOs, most of the good-to-great companies are unheralded. What does that tell us?

JC: The truth is, few people are working on the most glamorous things in the world. Most of them are doing real work—which means that most of the time they’re doing a heck of a lot of drudgery with only a few moments of excitement. The real work of the economy gets done by people who make cars, who sell real estate, and who run grocery stores or banks. One of the great findings of this study is that you can be in a great company and be doing it in steel, in drug stores, or in grocery stores. No one has the right to whine about their company, their industry, or the kind of business that they’re in—ever again.

FC: Let’s say that I’m not running a company. How do the good-to-great lessons apply to me?

JC: The basic message is this: Build your own flywheel. You can do it. You can start to build momentum in something for which you’ve got responsibility. You can build a great department. You can build a great church community. You can take every one of these ideas and apply them to your own work or your own life.

FC: What does your research suggest about the best way to respond to the current economic slowdown?

JC: If I were running a company today, I would have one priority above all others: to acquire as many of the best people as I could. I’d put off everything else to fill my bus. Because things are going to come back. My flywheel is going to start to turn. And the single biggest constraint on the success of my organization is the ability to get and to hang on to enough of the right people.

Fresh Capital raised through new listings on Pakistani Stock Exchanges during 2010.

Stock market provides a platform to corporate sector for listing their companies/securities on it and raising much needed capital through initial public offerings (IPOs) besides providing small investors to invest in securities listed on the stock exchanges.

Capital market of Pakistan witnessed an encouraging trend with respect to new listings on local bourses. A total of six companies listed with a total paid up capital of Rs. 32 billion, second highest amount raised in a year since 1991. Chemicals, Construction & materials, Power generation & distribution, Technology & communication and Textiles are the major sectors of the economy which preferred to raise funds through equity issuing.

In the outgoing year till November 2010, total offerings worth $255bn were seen in Asia which might exceed $295bn witnessed in 2007, according to Ernst & Young.

Major impediments:

  • There is no tax incentives for listed companies. The 10% tax differential available to listed Companies till 2002 has been abolished.
  • Over Regulation of Listed Companies as compared to unlisted companies increases the company’s administration costs.
  • Lengthy and cumbersome procedure of Listing. Filing of un-necessary documents along with listing application to the Commission and the Stock Exchanges.
  • No positive response for OTC Market from the issuers due to stringent Corporate Governance Regulations.
  • Minimum capital of Rs.200 million for listing seems to be a barrier.
  • Minimum allocation of capital to the general public seems to be a barrier.
  • Political and economic scenario prevailing in the country.


The market capitalization of the Pakistani stock market has grown by about $4 billion since November. The market capitalization of the Karachi Stock Exchange (KSE) has surged from US $34 billion in October, to US $38 billion as of January 12, 2011

“In January 2010 the benchmark index took off from 9,387 points … and it amounted to 12,020 points by gaining 1,633 points amid gradual improvement in trading and investment


To sustain the momentum of market growth, the government should introduce new investment products, a margin trading system and provide incentives to investors and other stakeholders, he said.

Factors That Affect The Stock Market

By Dr. Steve Sjuggerud, Advisory Panelist, Investment U

There’s such a glut of information these days: monthly investment magazines covering the markets… daily investment newspapers doing the same… and minute-by-minute coverage on CNBC. They’re all trying to tell you what’s driving the stock market, and they all love to tell you where the market is going to go. And much of the time, they’re wrong! It’s enough to drive you crazy!

I’m going to make your life a lot easier. Of all the factors that affect the stock market, only two things drive the markets. And you don’t need to check in on CNBC, newspapers or magazines to follow them. Just two things drive the markets; I call them The Two “E’s.”

The Two E’s… And How They Affect The Stock Market

The first “E” you can probably guess. The second “E” you probably wouldn’t guess right away, but it’s equally important… and it’s much less talked about. Since that’s the case, we’ll spend a little more time on the second “E” today…

The first “E” is earnings. Everyone talks about this “E,” and it is extremely important. The big question here is: What is the stock price in relation to the company’s earnings? That tells you, in general, whether a stock is cheap or expensive. This is what we need to know… and the information is easy to find.

In my research, I’ve found that, throughout history, you don’t make money in the stock market when the price-to-earnings ratio of the 500 biggest companies in America is above 17. Today, that number is… gulp… about 40. (You can follow this number at; use the “as reported” number.)

What you need to realize here is that, unless stocks fall by over 50% – or unless earnings more than double – you don’t even need to check in with this number. You know that stocks are expensive in relation to their earnings, and will be for a while. Just remember, history tells us we don’t make money in stocks when the price-to-earnings ratio of the market is above 17. I won’t say more here because so much is said and written on the topic of earnings in the mainstream financial press already.

The Second Factor that Drives the Markets Is EMOTIONS

Emotions are a huge part of investing. Do you think it was earnings that drove the Nasdaq from 1,500 to 5,000, and then back to 1,500, all in four years time? Did earnings get 200%+ better? And then 70% worse? No. Was the Crash of ’29, where stocks ultimately fell by 89%, due to earnings? No. Emotions played a big part in both of those examples.

The 10 Stages Of The Stock Market

Human beings, with both rational and emotional urges, are the market players. And the thing is, those emotional urges can (and do) often overtake the rational side.

Instead of explaining this at great length, it’s better if you just read my “10 Stages Of The Stock Market” below and figure out where we are right now. This “10 Stages” model is a tool for measuring the “emotional state” of the market today.

What are your friends and neighbors saying about the stock market? Ask them. Then figure out which quote below best sums up all their emotions. By doing this, you’ll know exactly where we are in the stock market. Of course, you’ll want to be a buyer somewhere around the end of the bear market and the beginning of the bull market.

Please read these “10 Stages,” and think about where you think we are now. When you do this, you’ll know where we are in this market.

  • BULL MARKET, LATE STAGE: “Darn it, other people not as smart as me are getting rich, and I’m just sitting here. I’ve got to get in on that!” (Late 1990s?)
  • BULL MARKET, PEAK: “Man, I am SMART. I’ve made a ton of money in stocks. And it couldn’t have been any easier. Practicallyeverything I buy goes up!” (Early 2000?)
  • BEAR MARKET, BEGINNINGS: “It’s just a correction. Buying the dips has worked like a charm in the past, and it’ll work again!” (Late 2000?)
  • BEAR MARKET, EARLY STAGE: “They say to buy and hold, so that’s what I’ll do, just keep on holding… it’ll come back!” (2001?)
  • BEAR MARKET, MIDDLE STAGE: “The correction HAS to be almost over by now. I’d sure hate to sell out right at the bottom, only to have the market roar back.” (Early 2002?)
  • BEAR MARKET, LATE STAGE: “Well, it’s too late to sell now. So I’ll just keep holding. Boy, I used to open my portfolio statement the second it came in the mail just to see my net worth going up, up, up! Now I dread opening my mailbox.” (Late 2002?)
  • BEAR MARKET, PEAK: “Okay, I give up. It’s time to start cleaning house and sell these stocks. Boy I really shouldn’t have put so much money into these things.” (Early 2003?)
  • BULL MARKET, BEGINNINGS: Nobody EVER makes money investing. I’ll never put any money in the stock market ever again. (When???)
  • BULL MARKET, EARLY STAGE: “Wow, prices have been going up lately. I hadn’t even noticed – I’d given up. Those foolish buyers, they’ll sure get what’s coming to them! I’m going to get out now, while things are up!” (When ???)
  • BULL MARKET, MIDDLE STAGE: “Hey, things are looking up. Maybe there is something going on here… Nah, once burned, twice shy! I’m skeptical – I’ll keep watching this sucker’s rally!” (When???)

By reading these objectively, I’d say we’re at about 5 right now, which means we’re in the middle stage of the bear market. (The problem is, you never know how long one stage will last.) I hear everything from 4 to 6 regularly these days. What do you think? (Incidentally, the absolute best time to buy is between stages 7 and 8.)

Good investing,


Today’s Investment U Crib Sheet

  • All you need to know about where we are in the market right now is The Two “E’s.” As for the first “E” -earnings – it will be years before stocks look good by that measure. As for the second “E” – emotions – just follow my “10 Stages of the Stock Market.” Then you’ll know when stocks are attractive to buy again.


Role of a Company Director after Company Registration in Pakistan

By: Muhammad Abdul, Synergy Business Consulting

When we discuss role of a Company Director, first of all we should know who can be appointed as a director of a Company registered in Pakistan?


Generally it is up to the members to appoint the people they believe will run the company well on their behalf. The ineligibilities that prevent anyone becoming a director of a Company registration (ed) in Pakistan  are;


If he:

  • is a minor;
  • is of unsound mind;
  • has applied to be adjudicated as an insolvent and his application is pending;
  • is an undischarged insolvent;
  • has been convicted by a court of law for an offence involving moral turpitude;
  • has been debarred from holding such office under any provision of this Ordinance;
  • has lacked fiduciary behaviour and a declaration to this effect has been made by the Court under section 217 of the Ordinance at any time during the preceding five years;
  • is not a member ; This disqualification shall not apply in the case of a person representing the Government or an institution or authority which is a member, a whole-time director who is an employee of the company, a chief executive or a person representing a creditor;
  • has been declared by a Court of competent jurisdiction as defaulter in repayment of loan to a financial institution, exceeding Rs. 1,000,000* and
  • is a member of a Stock Exchange engaged in the business of brokerage, or is a spouse of such member*.

(* The restrictions are applicable only in case of listed companies).


Responsibilities of a Director regarding Compliance to Companies Ordinance, 1984 (Companies Registered in Pakistan)


Every company director of a company registered in Pakistan has a personal responsibility to ensure that all the statutory documents are filed with the Registrar and the Commission as and when required under the Ordinance. In particular:

  • audited accounts (only for public limited companies including association not for profit); and private limited companies having paid up capital of Rs. 7.5 million or more);
  • annual returns (Form A/B);
  • particulars of directors or other officers (Form 29); and
  • notice of change of registered office (Form 21).


Failure to deliver documents on time is an offence under the Ordinance. On conviction, a director could be penalized with a fine and also debarred from becoming director.



Often a question is asked Are directors really prosecuted? The answer is Yes. On average of more than 2,000 directors are adjudicated / prosecuted each year for failing to file accounts and other statutory returns with the Registrar within the prescribed time. Persistent failure to comply with the statutory requirements on time may also lead to a director being disqualified and the company may also be wound up under certain circumstances.


As a director of a public limited company, or a private limited company formed in Pakistan having the paid up capital of Rs. 7.5 million or more you normally have a maximum of 5 months from the close of accounting year for filing your company’s audited accounts. If the accounts or other return(s) is/are received late, the company will not only pay additional filing fee but the company and its officers can also be punished with fine.


It is also the responsibility of the Board of Directors of a company, which is being incorporated in Pakistan to maintain proper books of accounts get the annual accounts audited by the auditor of the company, present the audited accounts before the Annual General Meeting for approval of the members within the prescribed period as provided under the law. In case of non-compliance, in filing the statutory returns within

prescribed period and apart from the other penalties for violating the specific provisions of the Ordinance, which include heavy amounts of fines and prosecution of the management leading to imprisonment of the defaulting directors/officers are liable to pay additional fee.


For a Company registered in Pakistan, to avoid prosecution and penalties/fines be avoided, make sure your company complies within the prescribed time, with all its statutory obligation not only pertaining to filing of its accounts and other statutory returns as required to be filed under the provisions of the Ordinance and the rules frame there-under but also with respect to:-


  • Issuance of shares certificates to the shareholders. (S.74 to 75)
  • Transfer of shares. (S. 76 to 81)
  • Registration of Charges (S. 121 to 136)
  • Maintenance of Registered Office Address (S. 143)
  • Holding of statutory meetings by a public company (S. 157)
  • Maintenance of Minute’s Book (S. 173)
  • Election of Directors (S. 178 to 180)
  • Appointment of Chief Executive (S. 198 to 203)
  • Appointment of Company Secretary (where applicable) (S. 204A)
  • Maintenance of books of accounts and other statutory register (S. 230)
  • Preparation, audit and presentation of accounts in the AGM (S. 233)
  • Preparation of quarterly accounts by a listed company S. 245)
  • Payment of Dividends within the prescribed period (S. 248 to 251)
  • Appointment of Auditor (S. 252 to 254)
  • Appointment of Legal Adviser (Companies Appointment of Legal Advisor’s Act, 1974).


In exchange for the benefits of trading with limited liability, companies must deliver certain information about themselves to the Registrar, who makes this information available for inspection by the public so that they can make informed decisions about companies that they may wish to invest in or do business with. Further, Documents / informations maintained by the registrar is the public record and available for inspection by the rest of the world i.e. the creditors, venders and general public for the purpose of making investment in the company, enter into contract and for other useful purposes.



Your legal/corporate consultant’s responsibilities to you depend on the agreement between you and him or her. However, the responsibility to file accounts and other statutory documents rests entirely with thedirectors. Ensure that your legal/corporate consultants have all the necessary

information/document to prepare and file the statutory returns on time. Keep close coordination with your consultants. Don’t just assume that they are getting on with the job.


Accountants, legal, corporate and financial advisers do not get adjudicated / prosecuted or penalized for late filing under the Ordinance. You do!


Professionals at Synergy Business Consulting can provide you best professional advice and support in registration of your business as a private limited company in Pakistan or in any country of the world.  You can Contact us Now.

Advantages of Limited Liability Companies

By: Muhammad Abdul, Synergy Business Consulting

The basic features and advantages to carry out the business through a company registered in Pakistan are as under:-

Distinct Legal Entity

A Company registered in Pakistan is separate from its shareholders/directors. It has its own rights and liabilities. It can borrow money and invests funds, own property, sue and be sued, enter into contracts etc.

Limited Liability and Protection of Personal Assets

Company Incorporation in Pakistan (also known as Company Registration in Pakistan) gives the privilege of limited liability to its members up to a maximum of their investment or share in the entity or undertaken by them in event of winding up. Debts of company are the debts of this artificial legal person and not of the people running the company or owning shares in it. Personal property of the shareholders can not be attached for the recovery of debts.


Easy Measurement of Investment of Every Person

In a company registered in Pakistan, the investment of every person, member, director, promotor is known as its pre-determined at the time of incorporation


Easy Transferability of Ownership of Shares

A private limited company registered in Pakistan provides clear and convenient legal framework for the transferability of interest (shares). It means that the process of transfer of shares in a company registered in Pakistan is easy and transparent.

Perpetual Succession

One of the major advantages of a Company registered in Pakistan is its Perpetual Succession. In contrast to partnership, the death of one or more or even of all the members does not affect its legal status and do not end the company.

Easy to Raise Funds

Preference by the financial sector in extending the financial assistance to documented and organized form of incorporated business.

Part of Regulated and Documented Sector – Accountability and Responsibility

Every Private Limited Company or other registered in Pakistan prepare its proper accounts and get them properly audited. So Preparation and audit of accounts shows accountability and responsibility.


Elevation of Business Status

Incorporation gives a status higher than partnership and Proprietor-ship in the organizational hierarchy.

Establish Credibility

Having an incorporated business would give any business more credibility among potential customers, vendors, partners and employees.

Compact Legal and Organizational Framework

The entity must function within the limits prescribed through its charter and regulates its existence through a set of bylaws.

Professionals at Synergy Business Consulting can provide you best professional advice and support in registration of your business as a private limited company in Pakistan or in any country of the world.  You can Contact us Now.

What is Company and How Company is Managed in Pakistan?

By: Muhammad Abdul, Synergy Business Consulting

The Law recognizes a COMPANY, as a legal person which in its own rights, is capable of owning property, making contracts, conducting litigations and also responsible for doing wrongs. When we look at these matters from practical angle, and at the way in which this artificial legal person functions; its corporate will is manifested, its decisions taken and its acts performed, we see that a company cannot do anything at all except through the human beings.

While registering your business as a private limited company in Pakistan (Company Registration, Company Formation, Company Incorporation in Pakistan) you should be aware, how a company functions? The business of a company is run and managed by its board of directors; which is headed by a Chief Executive. The companies appoint these officers as required by the Companies Ordinance, 1984 (hereinafter referred to as “the Ordinance”). The Ordinance necessitates the appointment of at least one director and a company secretary for a single member companytwo directors for a private limited companythree directors for an unlisted public company and seven directors and a company secretary for a public listed company. The director, or directors, must manage the company’s affairs in accordance with its memorandum and articles of association and the law. Certain responsibilities apply to all directors, whether executive or nonexecutive.

Professionals at Synergy Business Consulting can provide you best professional advice and support in registration of your business as a private limited company in Pakistan or in any country of the world.  You can Contact us Now.

7 Sources of Business Ideas

Business ideas are all around you. Some business ideas come from a careful analysis of market trends and consumer needs; others come from serendipity. If you are interested in starting a business, but don’t know what product or service you might sell, exploring these ways of getting business ideas flowing will help you choose.

1) Examine your own skill set for business ideas.

Do you have a talent or proven track record that could become the basis of a profitable business?

The other day I spoke to a man who had spent years managing cleaning services at a hospital. Today he runs his own successful domestic and business cleaning service. An ex-logger I know is now making his living as an artist; he creates “chainsaw sculptures” out of wood. And the examples of professionals who have started their own agencies or consulting service businesses are legion.

To find a viable business idea, ask yourself, “What have I done? What can I do? Will people be willing to pay for my products or services?”

2) Keep up with current events and be ready to take advantage of business opportunities.

If you read or watch the news regularly with the conscious intent of finding business ideas, you’ll be amazed at how many business opportunities your brain generates. Keeping up with current events will help you identify market trends, new fads, industry news – and sometimes just new ideas that have business possibilities.

For instance, same-sex marriages are now legal in Canada. There are now also entrepreneurs who are selling tourist travel packages that include a marriage ceremony to same-sex couples from other countries. Would you have identified that business opportunity when you heard that the Canadian marriage laws had changed?

3) Invent a new product or service.

Think back 30 years ago. Was there a huge demand for anti-virus software, Internet Service Providers, or desktop computers? No! The key to coming up with business ideas for a new product or service is to identify a market need that’s not being met. The clamor for ever-increasing security, for instance, has led to an explosion of new security products and services, ranging from iris-recognition machines through home security services.

Look around and ask yourself, “How could this situation be improved?” Ask people about additional services that they’d like to see. Focus on a particular target market and brainstorm business ideas for services that that group would be interested in. For example, there are millions of aging gardeners across North America. What products or services could you create that would enable them to garden longer and more easily?

4) Add value to an existing product.

The difference between raw wood and finished lumber is a good example of putting a product through an additional process which increases its value, but additional processes are not the only way value can be added. You might also add services, or combine the product with other products. For instance, a local farm which sells produce also offers a vegetable delivery service; for a fee, consumers can have a box of fresh vegetables delivered to their door each week.

What business ideas can you develop along these lines? Focus on what products you might buy and what you might do to them or with them to create a profitable business.

Continue to page 2, to read more ways of finding business ideas.Really. Once you develop an entrepreneurial frame of mind, you’ll see that finding business ideas is just as easy as finding leaves on trees. Here are more ways you can generate business ideas:

5) Investigate other markets.

Some business ideas aren’t suited to local consumption – but appeal greatly to a foreign market. My own little town is surrounded by acres of wild blueberries. For years the bushes produced berries that mainly fed bears and birds; B.C. has a thriving blueberry industry that doesn’t leave room for a wild blueberry market. But one entrepreneur realized that there is a high demand for products such as these in Japan – and those same wild blueberries are now being harvested and shipped. Finding out about other cultures and investigating other market opportunities is an excellent way to find business ideas.

6) Improve an existing product or service.

You know what they say about the person who builds a better mousetrap. That person could be you! A local entrepreneur has created an improved version of the hula hoop; it’s bigger and heavier so hula-hoopers can control it more easily and do more tricks. How did she come up with this business idea? She thought hula hooping would be a fun thing to do with her daughter, but found the commercially available product too flimsy.

There are very few products that can’t be improved. Start generating business ideas by looking at the products and services you use and brainstorming ideas as to how they could be better.

7) Get on the bandwagon.

Sometimes markets surge for no apparent reason; masses of people suddenly “want” something, and the resulting demand can’t be immediately met. For example, during the SARS epidemic, there was an insatiable demand for facial masks in several countries – and many entrepreneurs capitalized on this business idea.

A “bandwagon effect” is also created by larger social trends. There is much more of a demand for home-care services for the elderly than is currently being supplied. And the trend for pets to be treated as family members continues, creating demand for all kinds of pet-related services that didn’t exist even ten years ago.

Look at existing businesses and the products and services they offer and determine if there’s a need for more of those products or services. If there is, develop business ideas to fit the market gap.

Are you brimming with ideas for starting a business now? Write your business ideas down. Let them swirl around in your head and coalesce. And keep an open mind and continue to assess everything you read and hear from an entrepreneurial point of view. You don’t want to run with the first business idea you think of; you want to discover the idea that’s best suited to your skills and desires. Dream, think, plan – and you’ll be ready to transform that business idea into the business you’ve always wanted.

Business Ideas

It is always hard to start when one decides to run a business because we are often left wondering what to do. Business ideas are however easier to come by than you think. Many people start a business in an area of interest, such as writing or bookkeeping. The possibilities are however endless and they can come from many different sources. If you’re currently thinking of starting your own business, but aren’t what you what business you want to start, then maybe reading this article can help you on your way. Below are some sources of business ideas:

PRESENT / PREVIOUS EMPLOYMENT – A large number of small businesses are inspired by present or previous jobs. If you were great at your job, it could be a good idea to start your business in this field, as you would bring experience and know-how to your new business.

HOBBIES – What is it that you like to do? Often we are prepared to put a lot of time, effort and money into a hobby, why not consider making money from it? Many writers, for example, first started writing as a hobby.

NICHE MARKETS – Sometimes small pockets of a market are not being satisfied by the general market; make an observation, do your research – Is there a need you could fill?

PERSONAL OBSERVATIONS – Look around you, is there a need in your community that is not being satisfied or maybe the need is in a neighbouring community?

BY-PRODUCTS – Many products are derived from the waste of other products, for example, using scraps of materials to make colourful rugs for children or using coconut trash to make coconut cakes. Sometimes businesses dispose of things that could be used to make other products or charge a minimal fee for the waste.

IS THERE A PRODUCT ON THE MARKET THAT NEEDS IMPROVEMENT? – You are a consumer, there may be products that you think could do with more or less of particular ingredient, if you think you could do a better job, and can source the necessary assistance…well make a start.

DISTRIBUTE SOMEONE ELSE’S PRODUCTS – You do not have to create your own product, why not market or distribute someone else’s product for a percentage of sales?

EXPORT – Find market overseas for locally produced goods; research could prove integral to starting. Perhaps you have travelled to other countries and have noticed a lack in certain areas of the overseas market. Get information from the relevant authorities on how to proceed.

BUY DOWNTOWN, RESELL UPTOWN – You will be surprised at the vast differences in prices for similar products in these two markets, other people capitalize on the price differences, why not you!


GOVERNMENT AGENCIES – There are certain government bodies that can provide information about gaps in the market, make use of them.

FRANCHISE – If you have the cash and don’t mind giving up some control (much control in some instances, depending on the business) this could be an option for you. There are many franchise businesses out there, check them out, and see if any suit your interest or your pocket.

BRAINSTORMING – Gather a group of family and friends, use this group to suggest and evaluate business ideas.

CURRENT MARKET – Check market trends and see what’s happening. Which products are being sold quickly in the market at the moment?

LOOK AT IMPORTATIONS – Are there products being imported that you could produce at the local level? If particular products are being imported on a consistent basis, this is an indication that there is definitely a market that is not being adequately provided for by local producers. Many people are willing to support local producers even at the expense of paying a bit more for the product.

SUPPLYING RAW MATERIALS – Larger businesses sometimes depend heavily on small firms to supply raw materials. For example, larger firms in the canning industry depend on small farmers who produce fruits and vegetables. Find out if there is a market for raw materials that you could fill.

INVENT A BUSINESS – Many of life’s pleasures were born from simple ideas. If you have an idea that could prove beneficial, do not just push it aside because it is new; entrepreneurship is also about innovation.

BUY AN EXISTING BUSINESS – Many business owners start by buying an existing business. If you know of viable businesses being sold and are able to make a purchase, consider the possibility of owning one.

SPECIALISED PRODUCTS – Some goods and services are too specialized for large firms and work better for small businesses. Find out more about these.

SECP corporatization drive is in full swing


ISLAMABAD-May 16: The Securities and Exchange Commission of Pakistan (SECP) has
registered 327 new limited liability companies during April 2013 raising the corporate
portfolio to 62,203 companies.
The SECP in its continued efforts to promote corporatization in the country is holding
seminars with all stakeholders, conducting awareness campaigns, and extending facilities.
Out of the 327 new companies registered during April 2013, around 92% companies
registered as private limited companies, 5% companies registered as single-member
companies, while the remaining 3% registered as public limited companies.
A number of foreign investors showed interest in investing in Pakistan as confirmed by
investment in 12 new companies involved in diverse business areas. The Sectors include,
trading, telecommunications, power generation, lodging, tourism, fuel and energy,
import/export, automobiles and IT sectors. These companies have foreign investors from
Canada, China, Panama, South Korea, the United States, the UAE and Ukraine. The interest
of foreign investors is also a reflection of the SECP’s facilitative regime for foreign investors
including, fast track provisional registration of companies having foreign directorship.
Overall, the services sector has taken the lead in new registrations with 50 new companies,
followed by tourism with 45 companies, trading with 38, I.T. with 30, and the remainder in
broadcast media, construction, communications, food and beverages, finance and banking.
Out of the 327 companies registered, 103 companies were registered at the Company
Registration Office (CRO) in Lahore, while the CROs in Islamabad and Karachi registered
94, and 74 companies respectively.
During April 2013, returns for increase in the authorized capital of 84 companies were
accepted, resulting in total authorized capital increment of Rs. 32.11 billion. In addition, 96
companies filed returns for increase in their paid-up capital with the total increase amounting
to Rs. 9.04 billion.

Pakistan incorporated


Tuesday, July 2, 2013

Pakistan incorporated 

by Muhammad Ali

THE 2013-2014 budget should not be the yardstick to measure the new government’s performance or strategic direction on account of the short time period they had to finalise the budget proposals. However, the expected creativity was lacking, and the burden of state deficits seen to be shifted to existing taxpayers, which is not a long-term solution. For years we’ve heard the rhetoric of “broadening the tax base” which seems to have been falling on deaf ears. This could be either because the concept’s implementation methodology is not fully understood, or it is felt that tough measures required to bring taxable economic activity into the net would be difficult in a country driven by social and political pressures.

But the answer is simple: document the economy — in a way which benefits economic activity. The classic example is that of corporatisation of businesses. Sixteenth-century Europe cashed in on this centuries ago. Register businesses by introducing a fair system of taxation which motivates businesses to file tax returns, and in the process document the economy. If incorporated, individuals can also take advantage of limited liability, hence shared risks and easier access to finance. Yet, despite the corporatised form of business dominating the developed world for the last few centuries, we’ve only managed to corporatise 2pc of our businesses.

Around 63,000 businesses out of an estimated three million operate in the form of a company structure. An economic model driven by corporatisation of all businesses, irrespective of their size, sector or form, with every business contributing a share of its profits to the exchequer will help the state reduce taxes across the board and grant relief to the public. Changes in duties and tax rates alone will not help us take the tax-to-GDP ratio to a level of 15pc or higher. Something more needs to be done. Once we realise that ‘something’ needs to be done, the next question is: ‘what?’ The first, most obvious answer is political will. After recognition of this need, achieving an incorporated Pakistan over the next five years is a doable task.

The second is already being worked on — the Corporate Laws Review Commission established in 2006. During my tenure as chairman, Securities and Exchange Commission of Pakistan, we set up a dedicated secretariat to give impetus to this project, and to complete the research on and drafting of a new company law. Till date, we have been making ad hoc amendments to the existing company law. The proposed law is to be developed on specified principles, including the simplification of processes of registration, development of audit standards, giving investors a wider array of corporate structures, and moving towards a regime of proportionate regulation and enforcement without hassling the investors.

The third, and related requirement is that of taxation. Presently, incorporated entities pay taxes at a rate of 35pc, and are subjected to greater audit and regulatory requirements; whilst partnerships and individuals pay tax at a rate of 25pc, with little or no reporting or regulatory requirements. How then are we incentivising documentation? There is historical justification for this anomaly — the decision to encourage small businesses may have been right at the time that it was taken, but the business world has changed since then and the same objective can be achieved today by regulating entities in proportion to their size, as opposed to discouraging incorporation by levying higher taxes. Fourth is a conducive regulatory environment. If our businessmen perceive other jurisdictions to be more business-friendly with lesser possibility of unfair treatment, then we are doing something wrong. There has to be a revamp of the regulatory structure in Pakistan, especially in terms of development of HR.

Austerity measures should never compromise the quality of HR and foreign regulators need to be invited to Pakistan to impart skills, knowledge and training. This, coupled with market-based compensation packages and a performance-based work environment, will minimise the potential for misuse of power by the regulators. It would also expose the regulators to their role in developing the economy of Pakistan, as opposed to merely policing it. Last, an acceptable rate of taxation needs to be ensured. The basic principle driving higher collection of taxes should be that if the government needs more money, it should encourage people to make and declare more money rather than avoid investing, and try and hide profitability to evade taxes. The classic example is that of Far Eastern and Middle Eastern countries, which have kept the tax rate low but enforced it strictly, and their businesses are willing to pay the taxes as they are perceived to be fair. If we were to reduce our tax rate further and ensure that all businesses in Pakistan, irrespective of their form and size, are registered and subject to taxes, will we be better off or worse off?

We also need to rethink whether tax rate should be a function of the form of business or its profitability. The latter would be a more plausible answer — a business earning a lower level of absolute profit should be subject to a lower tax rate irrespective of its form, especially when its accounts and operations are more transparent, subject to greater regulatory scrutiny and it is therefore less likely to evade taxes. The federal government should consider taxing corporations at a rate which is lower than other forms of business. To avoid the possibility of tax loss in the short term, the transition can be phased out over the next few years. These recommendations are neither difficult to execute, nor will they require a lot of courage. But they do require political will — and from the gradual reduction of the corporate tax rate in this year’s budget, it seems that the will does hopefully exist.

The writer is the former chairman, Securities and Exchange Commission of Pakistan.

Organic growth of companies

DAWN Monday, December 31, 2012

In a developing country like Pakistan, policymakers try to adopt ‘the best international practices’ often with total disregard to the differing company and national cultures.

They forget that even the best of universally applicable practices have to be adapted with appropriate timing and sequence of ‘reforms.’ Here China has a lesson to offer. Policymakers in Peking say they have developed successfully ‘capitalism with Chinese characteristics.’

Similarly, quite often mergers of companies do not prove so successful because of conflicting company cultures with the buyer calling the shot. One cannot ignore the fact that much of the best international corporate or banking practices over the past few decades were more of a myth rather than a reality as proved by the US and European fiscal crisis and the Great Recession of 2008-09.

In Pakistan, the Security Exchange Commission of Pakistan wants to promote the ‘best international practices’ to protect investors, ‘mitigate systemic risk’, spur growth of corporate sector and develop broad-based capital market. In principle all these objectives would appear to be laudable. The problem lies in how to go about it, assuming that the regulatory framework can only mitigate the systemic risk by adopting practices best suited to the country’s soil while drawing upon the experiences of other countries particularly in similar stages of development.

In the current investment environment, as reported in this newspaper earlier, private companies are reluctant to go for listing. “If there is no need for money from the capital market” , says a businessman, “why should one go for listing.” Managements of some listed firms complain that ‘ the cost of hassles do not justify the gains from listing.’ And a textile industrialist , frustrated with the problems he is facing, says “sorry, I am in no mood to be lectured on the virtues of corporate governance.”

Instead of opting for listing to raise money for new projects, some the capital spending is currently going into industrial consolidation through equity investment, encouraged by tax incentives, and some into inter-corporate financing and outsourcing of non-core business by big companies. In fact anecdotal evidence indicates that at least for the time being listed public companies are no longer in ‘fashion.’

With networking of value-chains helped by the Information Technology replacing production under one roof, production facilities are being dispersed widely. This is so visible in textiles and auto industry.

Conventional trends in investment are changing whether it is equity/debt ratios or sectors. Companies providing farm inputs are prospering. Apparently, the food sector is attracting quite a bit of investment. And the informal sector seems to be doing better than the formal segment.

As current trends indicate an improved corporate culture can come about when the private sector itself realises that modern corporate code leads to what is described as ‘a smart operation for businesses’. Meanwhile, in the current phase of sluggish investment and rising unemployment, it would be in the fitness of things to encourage capital spending rather than stifle the growth process through over-regulation.

Well over 60,000 non-listed companies are registered with the SECP with more than half ‘inactive’. The SECP plans to focus on them next year. In times of multiple crisis, rules need to be relaxed rather than tightened. Administrative compliance does not work.

It is an era of voluntary compliance. In Pakistan as well as worldwide, rules and regulations are being observed more by violation than compliance. The writ of the state has everywhere weakened with the sway of the market forces. There is no social force strong enough to counter developing fault lines in corporate governance. Regulators have been proved incompetent in a complex and fast changing world.

The market has to be encouraged to observe voluntary self-discipline which would not be difficult to achieve if ‘perverse subsidy’ or ‘bailout’ is denied to companies in case of self-created crisis.

The withdrawal of ‘perverse subsidy’ would end ‘rent-seeking’ and encourage organic corporate development. American corporate executives were tempted to take huge risks as they know that were ‘too big to fail’ and would ultimately be bailed out by tax payers’ money.
Regulations or no regulations, this way corporate culture cannot improve.


December 20, 2012


The Securities and Exchange Commission of Pakistan (SECP), the apex regulator, has the mandate for providing grounds for a modern and efficient corporate sector, protection of investors and, promotion of investment for a thriving economy. In view of the need to bring policy changes in line with global best practices, the SECP prioritised its strategic goals towards promoting corporatisation in the country.

Owing to consistent efforts by the SECP and synergy with stakeholders, the pace of corporatisation in the country has gained momentum over the last decade.

Snapshot of corporate portfolio: 

However, there is still enormous untapped potential for growth of corporate sector as there are only 60,000 registered corporate entities as compared to more than 3 million businesses in the country thereby corporate mapping constituting of mere 2% of business entities. Interestingly, these 2% of businesses contribute 63% of direct and indirect taxes to the government. Though change to the business environment has been witnessed during the past few years, the paradigm shift of business, ie, from conventional non-documented businesses to registered corporate entities has been rather vigour less. In essence, corporatisation is aimed at facilitating companies so as to improve competitiveness and access to capital borrowing in the local and global market. This, besides providing growth opportunities to businesses, entails in itself the perfect recipe for a thriving economy. For clarity, synopsis of a few benefits of corporatisation is evident through the features highlighted below:

i. Distinct legal entity: 

Legal capacity to enter into a contract, company can sue or be sued in its name.

ii. Limited liability and protection of personal assets: 

If a company becomes insolvent and is wound up, only the assets of the company can be used to clear its debts. The owners of the company have no personal liabilities, and thus are not made bankrupt. The shareholders of a company have the limited liabilities to the extent of their investment in share capital of the entity.

iii. Enhanced credibility with responsibility and accountability: 

The status of being registered as a company adds credibility in the eyes of internal and external stakeholders particularly the equity holders as they believe that their interests shall be safeguarded owing to the presence of regulatory authorities and proper legal framework.

iv. Long life enterprises with perpetual succession: 

A limited company is the most enduring legal business structure. The companies may continue on, regardless of what happens to its individual directors, officers, managers or shareholders unlike sole proprietorship or partnership. Critical circumstances are taken care of through legal documentation and process.

v. Easy transferable ownership/shares: 

In case of a company, the process of transferring ownership/shares of the company, whether wholly or partly, is defined in statute, while in case of other forms of businesses difficulties arise.

vi. Raising finance: 

The greatest benefit of corporatisation is the ability to raise capital through allotment of shares and/or obtaining debt from financial institutions unlike constraints faced by sole proprietorships and partnerships dependent hugely on personal liabilities.

vii. Separation of ownership from management: 

The shareholders own the company but Board of Directors manages the company. The role and responsibilities of directors are defined and the rights of shareholders are exercised keeping in view the relevant statute.

viii. Defined legal framework: 

The obligation of company to work within the ambit of a defined legal framework is of great importance and relief to all stakeholders. Each company must have a Memorandum of Association and Articles of Association prior to commencement of operations. Moreover, a company is obligated to run its affair within the regulatory ambit.

ix. Internal dispute resolution mechanism: 

In case of a company, there is a reduced risk of unresolved conflict or dispute owing to predefined domains of operation and dispute resolution as defined by relevant corporate law. Contrary to that in other business forms, the risk of dispute is high due to arbitrary mechanism and is directly proportional to scale of business loss.

Despite the benefits accruing the corporate structure, empirical analysis of rather sluggish growth of corporate sector suggest that rigorous regulatory compliances like maintenance of complete set of books of accounts, conduct of audit, holding of various general and board meeting, election of directors etc are impeding the corporatisation process. Further, uniform reporting requirement for all types of business, irrespective of their sizes, is also hampering the way to smooth corporatisation.

Small businesses should be treated under a different category of regulatory regime while medium and large businesses must be subject to more stringent sets of regulatory requirements. Noteworthy is the consequences of higher tax rate for corporate sector otherwise than that for AOP, that virtually outweighs the benefits likely to accrue to the corporate entities. Needless to mention that tax evasion or avoidance is also difficult to be resorted to after corporatizing the business.

An essential for achieving corporatisation is the need for having a more structured corporate law, which could ensure a hassle-free operation for all type of businesses from large-scale units to small-size entities. For the aforesaid purpose, the SECP has established a task force, Corporate Law and Review Commission (CLRC), which is drafting a new law for the country after detailed study of global best practices, relevant laws of international jurisdiction as well as keeping local corporate culture and ground realities in mind. The new law is expected to be finalized soon. And public consultation will be part of the process. It is hoped that the new law will bring Pakistani corporate legal regime on a par with international norms and standards.

Despite constraints, the SECP has time and again focused its efforts on competitive growth of corporate sector in the country. The key initiatives, acting as catalyst for purpose of corporatisation are discussed below.

Despite constraints, the SECP has time and again focused its efforts on competitive growth of corporate sector in the country.

The key initiatives, acting as catalyst for purpose of corporatisation are discussed below. 

i. Fast Track Registration Services: 

In order to facilitate prospective promoters, corporate consultants and management of the companies and in view of technological development, the Fast Track Registration Services (FTRS) for incorporation of companies have been recently introduced by the SECP. It ensures quick disposal of incorporation cases, ie, within four working hours and is available for both online and offline cases. The SECP has set an example, on a par with international jurisdictions by providing same day fast track company incorporation facility. This initiative is expected to promote corporatisation and in the longer run, shall promote investment, healthy growth of the corporate sector and development of economy.

ii. e-Services Project: 

In order to promote transparency, paperless environment and an effective facilitation mechanism, e-Services project was launched in 2008. E-Services entails promoters/companies to file requisite returns/documents to the SECP through the internet. This project has effectively reduced turnaround time and has won accolades from its users and relevant domestic/international agencies alike.

iii. Companies Regularisation Scheme (CRS): 

Time and again, the SECP rolls out major facilitation scheme known as Companies Regularization Scheme (CRS). The CRS provides defaulter companies an opportunity to file their overdue statutory returns and annual accounts with reduced additional filing fees and also absolves the defaulter companies from penalties imposed on filing of overdue documents. Through the CRS, the SECP foresees and has experienced enhanced compliance rate.

iv. Model Memorandum and Articles of Association: 

The SECP took a major step towards facilitating promoters by placing model memorandum and articles of association on its website. The promoters can take model memorandum and articles of association, relate it to their industry and submit the same with the documents meant for incorporation.

v. Guidebooks: 

Numerous guidebooks in different languages have been developed and drafted to facilitate promoters and corporate sector and for creating awareness regarding statutory requirements of the Companies Ordinance, 1984. All guides have been placed on the SECP’s website.

vi. Facilitation Desks: 

The facilitation desks have been set up at the regional offices to facilitate and provide information to all local and foreign promoters visiting the SECP’s offices.

In conclusion, the way forward for the SECP is corporatisation of Pakistan. The SECP, as in the past, shall work with other law-enforcement agencies for removing the present and potential constraints in the way of corporatisation enable businesses to thrive in a competitive environment that fosters sustainable structure in the longer run and achieves the broader goal of documentation of economy. Nevertheless, the same shall help Pakistan to prominently place itself on the global business canvas.

Private Limited Company Registration in Pakistan Pros & Cons

Private Limited Company

Establish a Company is the most formal way of business in Pakistan. It is formed under company’s ordinance 1984. Securities and Exchange Commission of Pakistan is the regulatory body

How to Register?

  • Availability of Name
  • Copy of national identity card or passport
  • Form-1
  • Form-21
  • Form-29
  • Memorandum and articles of association
  • Article of Association
  • Apply for a national tax number (NTN) and register for income tax
  • Digital Signatures from NIFT (Pakistan) for each director
  • An address for your company in any one province of Pakistan or Federal Territory
  • Necessary Fees to be paid



  • Limited Liability: It means that if the company experience financial distress because of normal business activity, the personal assets of shareholders will not be at risk of being seized by creditors.
  • Minimum number of shareholders need to start the business..
  • The business will continue even if one of the owners dies.
  • More capital can be raised as the maximum number of shareholders allowed is 50.
  • Scope of expansion is higher because easy to raise capital from financial institutions and the advantage of limited liability


  • Growth may be limited because maximum shareholders allowed are only 50.
  • The shares in a private limited company cannot be sold or transferred to anyone else without the agreement of other shareholders.
  • Profits have to be shared amongst large number of people.

Documents required for registration of a Single Member Company in Pakistan

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


Registration / Formation / Incorporation as a Limited Company in Pakistan

Registration / Formation / Incorporation as a Limited Company in Pakistan

Business Startups in Pakistan require a host of corporate formalities.

Major Types of Businesses in Pakistan are as under:

A person who intends to start a business in Pakistan can work as any of the following;

(i) Sole trader / Sole proprietorship / One person business and Sole service provider.

(ii) Partnership Firm (Minimum two and maximum twenty persons can form a partnership firm) usually Doctors
Accountants and Lawyers get their business/practice registered as partnership firm.

(iii) Registration / Formation / Incorporation as a Limited Liability Company.Type of companies in Pakistan are as     under;

  •  Single member company (a private limited company formed by one person)
  •  Private limited company (a private limited company formed by minimum two person)
  •  A Public Limited Company (formed by minimum three persons ) 
  •  Companies limited by guarantee

(iv) Association not for profit, Non Government Organization (NGO, NPO, u/s 42 of Companies Ordinance, 1984).

(v) Associations of traders.

The process of Registering a Business in Pakistan is as under:-

The Steps to formation/incorporation of a company in pakistan are as follows;

1.Seek Approval from the concerned ministry if special permission before incorporation/formation of a  company in Pakistan is required.

2.Seek approval for the availability of the proposed name.

3.File  a range of documents to the Registrar which varies from company to company depnding on whether it is a single member company, private limited company, public listed company, public unlisted company, banking company, small company, foreign company and so forth.

4.Receive Certificate of Incorporation or Certificate of Commencement of Business.

5.Proceed with other registrations if required which may include local chamber of commerce, State Bank of Pakistan, Income Tax registrations, Sales Tax registration and so forth.
Things You’ll Need:

  • Computerized National Identity Card (CNIC) 
  • Passport copies for non-residents
  • Documents drafted by SBC
  • and that’s it