Service overview
A Section 42 licence is SECP's advance permission for a qualifying not-for-profit company.
A company certificate does not itself authorise a regulated business. Depending on the activity, SECP may require prior formation permission, incorporation, a separate operational licence, and continuing financial and fit-and-proper compliance.
Who qualifies for a Section 42 licence?
At least three promoters must establish charitable or other permitted purposes; no distribution of income or profits to members is permitted.
Promoters must commit the company's funds and income to lawful not-for-profit objects and cannot distribute dividends to members. Any proposed commercial activities must be ancillary or otherwise permitted by the intended Section 42 licence.
Documents and information for Section 42 Not-for-Profit Licence
Prepare the following information for section 42 not-for-profit licence. The relevant regulator may require further forms or certified evidence, depending on the applicant and chosen procedure.
- Proposed objects and activities
- Promoter IDs and declarations
- Draft memorandum and articles
- Financial plan
- Governance arrangements.
How do I obtain a Section 42 licence from SECP?
- 01Establish licensable not-for-profit objectives
Confirm at least three promoters, qualifying objects and an enforceable prohibition against profit distribution to members.
- 02Submit the prescribed Section 42 application
Apply under section 42 and regulations 4–5 with the current SECP checklist, promoter declarations and proposed constitution; the 2025 checklist is available from SECP.
- 03Receive licence before incorporation
Do not apply for ordinary incorporation as a substitute for the licence; incorporate only following grant and comply with its conditions.
- 04Implement Section 42 corporate safeguards
Maintain the required board structure, permitted purposes, separate finances and annual SECP licence-related compliance.
Regulator resource: SECP Section 42 — regulations and checklist
After registration or approval
Maintain the approved objects, funding records, governance and licence-specific reporting.
Governing law & official references
Section 42, Companies Act, 2017, regulations 4–5, Companies Regulations, 2024, and applicable Section 42 licence conditions.
The links below lead to government or official regulatory sources relevant to this service. Use the currently consolidated Act, regulations, statutory checklist and official portal when making an application.
How Chambers can assist
Chambers can review the legal route, identify regulatory constraints, prepare or review the supporting corporate and legal documents, manage the prescribed submission and correspond with the competent authority where instructed. The scope of the engagement will be determined by the applicant’s particular circumstances.
For an initial enquiry, identify the proposed activity, applicant entity and current stage, and provide the available documents indicated above. Please avoid sending confidential or identity-sensitive records through an unencrypted first contact.
Common questions about Section 42 Not-for-Profit Licence
Who is eligible for Section 42 Not-for-Profit Licence in Pakistan?
At least three promoters must establish charitable or other permitted purposes; no distribution of income or profits to members is permitted.
What documents are needed for Section 42 Not-for-Profit Licence?
Proposed objects and activities; Promoter IDs and declarations; Draft memorandum and articles; Financial plan. Additional requirements can apply to the actual business or regulator.
How do I obtain a Section 42 licence from SECP?
Establish licensable not-for-profit objectives: Confirm at least three promoters, qualifying objects and an enforceable prohibition against profit distribution to members. Submit the prescribed Section 42 application: Apply under section 42 and regulations 4–5 with the current SECP checklist, promoter declarations and proposed constitution; the 2025 checklist is available from SECP. Receive licence before incorporation: Do not apply for ordinary incorporation as a substitute for the licence; incorporate only following grant and comply with its conditions. Implement Section 42 corporate safeguards: Maintain the required board structure, permitted purposes, separate finances and annual SECP licence-related compliance.
This guide is general information, not advice on your facts. Check the applicable law, notifications, updated regulator checklists and jurisdiction before acting. The authority alone determines eligibility, acceptance and approval; no outcome or processing period is guaranteed.