What is Section 42 Registration?
Section 42 of the Companies Act 2017 enables registration of companies limited by guarantee — the legal structure for organisations formed for charitable, educational, religious, social, or other non-profit purposes. Unlike a regular company, a Section 42 company does not have share capital and cannot distribute profits to members.
Why Section 42 matters: SECP Section 42 registration is recognised by all major international donors including USAID, DFID, World Bank, UN agencies, and EU — making it the preferred legal structure for organisations seeking international funding. It also enables FBR income tax exemption application.
Section 42 companies are commonly used for: welfare organisations, health and education NGOs, professional associations, chambers of commerce, sports clubs, research institutes, and community development organisations.
Our Complete Section 42 Package
Objects Clause Review & MOA Drafting
We draft a comprehensive Memorandum of Association with objects clause that accurately describes your programme activities and satisfies SECP requirements for non-profit purposes.
Governance Documents
We draft the Articles of Association covering membership, board structure, meeting procedures, financial controls, and winding-up provisions — aligned with international donor governance expectations.
SECP Application & Submission
We complete the SECP online application with all required documents and manage the entire process through SECP's review and approval — typically 3–6 weeks.
FBR NTN & Tax Exemption Application
Immediately after SECP registration we obtain your NTN and prepare the FBR income tax exemption application under Section 2(36) of the Income Tax Ordinance.
Documents Required
- Directors / Members (minimum 3): CNIC copies · Contact details · Personal NTN
- Registered Office: Address proof — utility bill or tenancy agreement
- Organisation Details: Proposed name · Geographic scope · Programme description · Source of initial funding
- Governance: Adeem Consultant drafts MOA and AOA — you provide information about your intended programmes and governance structure
FBR Income Tax Exemption for NGOs
Registered Section 42 organisations can apply to FBR for income tax exemption under Section 2(36) of the Income Tax Ordinance. Once approved, the organisation's income from grants, donations, and programme activities is exempt from income tax.
Donor requirement: International donors typically require both SECP Section 42 registration AND FBR income tax exemption as minimum legal requirements for grant funding. Adeem Consultant ensures both are completed correctly as part of a single coordinated package.
NGO Registration — FAQs
Questions about NGO registration? WhatsApp us on +923222422347
Section 42 companies are regulated by SECP and have board governance similar to companies. Trusts are governed by the Trust Act and are less regulated. International donors typically prefer Section 42 companies due to governance transparency and SECP oversight.
Typically 3-6 weeks from complete document submission to Certificate of Incorporation. SECP reviews Section 42 applications more carefully than commercial companies. The FBR exemption application takes an additional 4-8 weeks.
Yes. Foreign nationals with valid Pakistani visas can be directors. Additional documentation including passport copies is required.
A minimum of 3 founding members/directors is required for Section 42 registration in Pakistan.
Yes. SECP requires an annual return from all registered companies including Section 42 companies. FBR also requires annual income tax returns even if an exemption certificate has been issued.
Yes. A properly registered and FBR-compliant Section 42 company can receive international donor grants. Additional registration with Ministry of Interior or provincial governments may be required depending on the funding source and amount.
The exemption under Section 2(36) exempts qualifying non-profit organisations from income tax. Adeem Consultant prepares and submits the complete exemption application as part of our Section 42 package.
Yes. The restriction is on distribution of profits to members — not payment for services rendered. Section 42 companies are permitted to pay reasonable staff salaries and operational expenses.
SECP Section 42 registration is recognised by all major international donors including USAID, DFID, EU, UN agencies, and World Bank. Some bilateral donors also require additional government NOC registration.
Annual SECP Form A return, audited accounts for larger organisations, FBR annual income tax return even with exemption, and maintenance of statutory books. Adeem Consultant provides complete annual compliance management for NGO clients.
Register Your NGO Today
Complete Section 42 registration including SECP, NTN, and FBR exemption application. Pakistan's most experienced NGO registration specialists.
Mon–Sat 9AM–7PM PKT | adeem@adeemconsultant.com | Lahore, Pakistan