NEW STARTUP BUSINESSES
Welcome back to Pakistan’s leading business consulting company, Evolution Business Consultancy
Here we discuss about startup businesses. We will be dealing with
frequently asked questions that usually individuals have when they start any new business. We will be
focusing on most important and most significant questions that are essential for any businessman
before he initiates his implementation of business idea. We have been inspired by the questions asked
by Mr. Ziauddin of Dera Ghazi Khan and these 18 questions have definitely left an impact that I feel that
their answers should be shared with everyone out there. These questions hold a great amount of
significance for all those who are and who are not aware of business startup implementation and
registration of company or business.
Let us look at the following
1. Is it a compulsion to have a partner for business registration?
The answer to this question is No. You do not need a partner for business registration. You can start a SMC company with your NTN. For example if you have a shop, you can follow this protocol and carry on with your work.
2. Can be a partner be added after the registration?
If you are starting your business with just an NTN, you can not add a partner. But, you can separately start a company for example a private limited company or a company with partnership agreement. This way you can add a partner to a company. If you start a sinle member company (SMC) private limited, then you can convert it in future and it will then be called private limited company instead of SMC. This way you will be able to induct a partner in future.
3. Is it a necessity to have an office for registration?
Yes, it is a must to have an office for registration but initially at start if you register company from any address, you will get registration. But usually the issues that arise after the registration are at the time of bank account opening. Usually, the bank pays a visit to personally verify the address, which is the point where issues have reported to arise. The banks then reject the request of account opening due to non-verification of office address. Also, if you are doing an import/export business, previously there used to be sales tax registration verification as well but now it is online so physical verification has halted but there is a registration in custom which makes it mandatory to have a commercial address and that too is verified by a customs inspector who verifies it and then license is allotted.
4. Can a previous business be again shown as office?
Yes, if you are running a business in an office and you want to start a second business in the same office, you can show that. There is no problem in that.
5. Can the new registration be named as per old business?
In this case, for example, if you go to SSCP and tell them you want to set up a company, SSCP itself has 100,000 companies registered with it. But if you have been working on your NTN or your company is unregistered since last 5 to 10 years and you are operating it, like most Pakistanis do and have been doing since quite a long time and now you intend to register your company, the first thing to look at would be the companies that are already registered have no conflict or resemblance with the name you have proposed. If the name is already registered or a name associated with it is already registered, then you will not be allowed to use that name. In that case you will have to change the name.
6. What will be the expenditure and how much is the expected time margin if we get it registered from you?
It depends, for example, if you ask us to setup a company, our consultation fee is Rs. 50,000 to manage any business. Also, any normal company would take 5-7 days to get registered. In addition, sales tax chamber and custom takes around 1-2 weeks if you are dealing in import and export business otherwise you can open a bank account in 5 to 7 days and you can start your work. We also have promotions running through during which we offer discounts as well. If ever you want to get your company registered, please feel free to contact us on WhatsApp, Call, and Email. We will try to provide you with the best possible service with the best possible quotation.
7. What is the annual fee of Legal Advisor?
Legal Advisor comes into play if the capital of the company is more than Rs. 3 million for example Hajj Company, Security Agency Company. For them it is mandatory to appoint legal advisor. Otherwise, small companies do not require a legal advisor and there is no regulation on that.
8. Registration of the Chamber of Commerce should be of the same city or it can be of any other city as well?
It is better to have registration of the Chamber of Commerce of the same city as that of your business but if you have a branch office in any other city, you can take registration from that city’s Chamber of Commerce as well.
9. Is it ok to start a business on a small scale right now and get registration done later on?
Legally, whenever you start a business, it is mandatory to get it registered. So ideally, you should get it done beforehand. Secondly, if you are starting a business with a doubt that maybe it would run or maybe it might not, then you should not get it registered immediately because you already have a doubt. If you are focused and you have started after proper planning and you have a strong determination and vigor in you, then do not step back, stay ahead, stay committed, you will face problems but so does everyone and everywhere, find solutions and go on. And, if you start any business right now and do not get it registered and later you decide that you want to get it registered and for instance the name you choose is not available or taken or if someone has launched a brand on that name, you will lose your base and hard work that you have rendered for that name. Then, if you try for that name and it is already being used and it causes a conflict, you will have shut your business down as now that name is their entity. Either you start with a new name or you lose your goodwill. So, its totally your decision how you want to carry it forward and pursue with it.
10. Are there any advantages of partnership?
Basically, partners have different purposes. Partners usually aid in capital, skills, support and even in investments. Also, it can help overcome fear of starting a new business. For example, from my own experience, we plan to add a friend in our business so that we could work together towards our goal. So, there are both advantages and disadvantages. It all depends on your perception when you are starting your own work. If you think you can manage it all by yourself, both financially and managerially and you have adequate resources to buy and sell your stuff or you have some good friends or acquaintance who can fund you initially and you can pay them back as you grow, then you think about it. Hence, it all depends case to case and how it works for you.
11. Can partners be two in number or more than two?
Definitely, if we talk about private limited company, it should have at least 2 partners and it can go as high as 50 partners. It can even exceed 50 partners but for that you need a limited company. Limited company is further divided into listed and non-listed company, that is a separate topic altogether.
12. Does licensure have a grading system like A, B or C.
There are no such grades or categories for licensure especially in general business. In construction companies, if you get government contracts, then there are some categories formed by Pakistan Engineering Council that demarcates the limits of project that can be taken by any company depending the resources and registrations. Other than that, any other business for example import and export business stand at the same level and all companies are regarded as at one level.
13. Once you get your license registered, is it to easier to get visa of any country?
It is a myth that getting a visa is linked to license registration. Factually, there is no correlation between the two. But yes, it definitely leaves an impact on the visa officer is giving you the visa because they are usually looking for reasons for you to come back and when they see you have passionately started your own business and you are working as a successful entrepreneur, it definitely boosts your visa application as he can now see the reasons of you coming back. Your ongoing business and your successful business create a very good profile of yours which leaves a very positive repute on the visa officer. The more convincing your profile and your application is, the higher the chances of you getting the visa. It all depends on how much you can convince the visa officer. Additionally, if you are doing an import and export business and you have a good travel history even to places which are easily accessible for example Gulf countries, Malaysia, Singapore or Thailand, attend business expos there and it will boosts your profile and hence your chances of getting the visa. But again, it is a matter of chance. We have seen businessmen with million dollar transactions getting visa rejections. So, it is not that you form a company and you are liable to get a visa. It is all a matter of chance.
14. Is there any educational limitation for business registration?
There is no educational limitation for business registration. But capital holds a great amount of significance in initiating a business. Some businesses like overseas employment bureau require a minimum educational requirement of matriculation. Other than that, to my knowledge, there are no other mandatory requirements. But for example if you have an engineering related company, you will need to hire an engineer. So, these are some basic rules to adopt the skills that you cater.
15. If there are two or more partners, can any one of them issue a cheque?
Of course, any partner can issue a cheque. We have seen companies with 200 to 300 directors, and it is pre-decided who amongst them will manage company bank accounts, will there be one signatory and more than one signatory or two or three individuals are appointed to ask as signatory or maybe limits are allotted for example an accountant can only clear a cheque of Rs. 25000, Rs. 50000 or Rs. 100,000 or maybe if there are two signatories the limit can go as high as Rs. 500,000 and if there are three signatories, the range can go higher. So, it all depends on bank policies and terms and conditions and it can all be customized as per your discretion. Boards of directors are the ones who usually decide all these matters in board meetings.
16. If you import stocks from any country, is the route permit easily given?
If you have import and export company, you can import or export anything. There is no need of a route permit for that. These 4 to 5 registration steps are enough for it, details of which are already shared in another video. Those steps can guide you in registration and after that import or export is easily permitted for general trading except for certain goods that need a separate license.
17. If we intend to join your course, how much time will it take to complete the course, is it just online course or we will have to travel to Islamabad as well?
Initially, we started with four day trainings but that was not much fruitful as a lot of things were left behind. Now, the course is online as we have individuals from different countries as well who have opted for this course. Friends from different cities had difficulty in commuting and then accommodating in our city. Hence, now the course is completely online. This is a 2 month course in all. You are issued a LMS (Learning Management System) user id and password. You can login through that and join the relevant classes. For now, it’s a completely online course and in 2 months you get a great idea of import and export business. We start from a beginner level and move towards advance level. We give all relvant information regarding procedures of import and export business, all practical knowledge is covered in this course. It also aids in many local businesses as well and is of much help. Weekly, we have two classes and by the end of two months, you become an expert of import and export business. Also, by the end of one month, many of our students have started their own work and Alhamdulillah are very successful today.
18. If we like any product in Iran and intend to purchase it from there and bring it to Pakistan or if we intend to take any product from Pakistan to Iran, do we need any Import or Export registration for that? Is it mandatory?
For Iran, there are some international restrictions as well. So first, you should check that. This all too is covered in our course. Currently, trade to Iran is via Balochistan border through barter system. But through banking channel which is the proper and official way of doing it and is according to international terms of import and export is currently non-operational. So, if you intend to do business with Iran, you should be aware of all the rules and regulations so that you are aware of any lose that you may incur during the process of your business.
How to Register a Private Limited Company
How to Register Trademark in Pakistan
Sole Proprietor Business / NTN Registration