Following procedure is followed for formation of companies:
In the first stage the availability of name is checked from SECP. SECP ensures that two companies with same name do not get registered.
In the second stage Memorandum and Articles of Association are prepared and signed by the sponsors (first shareholders) of the company.
In the third stage memorandum and articles along with certain other forms are filed with SECP for registration.
SECP after checking the documents and ensuring that all procedures for formation of company have been fulfilled issues a Certificate of Incorporation to the company. The date mentioned on certificate of incorporation is the “date of birth” of the company.
Private limited companies can start business immediately after getting the certificate of incorporation.
Public limited companies, however, must fulfill certain conditions after which a certificate of commencement of business is issued to them by SECP. These requirements have been listed in detail in Section 146 of the Companies Ordinance 1984.
Public companies can start their business after receiving certificate of commencement of business.