Describe the principal line of business using the work your company does
“Trading, services and all lawful activities” gives a founder little help when a bank asks what the company actually does. A useful description names the product or service, the customer and the way the business earns money. It should be understandable to someone who has never met the owners.
Start with a short business explanation
Draft a plain-language sentence before writing a memorandum clause: “We sell inventory-management subscriptions to small retailers and charge a monthly fee.” That is an input to the legal wording, not a ready-to-file clause. It is much easier to review than an unrelated list copied from another company's documents.
SECP's incorporation FAQ uses the activity associated with substantial assets or substantial revenue, whichever is higher, to explain principal business, and requires the name to be commensurate with it. Where those indicators point in different directions, prepare both sets of figures for review rather than choosing the description you prefer.
Worked example: a business model changes
Consider an illustrative software company. Its first-year revenue is Rs 6 million from subscriptions and Rs 2 million from implementation work. In the next year it plans a hardware distribution operation. These figures explain the existing revenue mix; a future sales target alone does not establish the current principal activity.
| Evidence | Current position | Question for the review |
|---|---|---|
| Revenue by activity | Rs 6m subscriptions; Rs 2m implementation | Does the existing description capture the actual service? |
| Assets used by activity | Prepare a separate asset schedule | Does asset concentration point to a different activity? |
| Proposed hardware business | Supplier proposal and forecast only | When does the proposed change become an actual change? |
| Current memorandum and name | Attach the filed versions | Which wording or other record needs alteration? |
Keep forecasts clearly labelled. If the asset records are incomplete, say so. A reviewer should be able to distinguish what happened, what is planned and what remains unverified without searching through a sales presentation.
An object clause is not an operating licence
A registered activity description does not by itself establish permission for regulated work. SECP's incorporation FAQ identifies specialised activities requiring separate permissions. Before accepting work, ask which regulator covers the proposed activity, whether the company or an individual must be licensed, and what evidence shows that permission is active.
For example, a construction proposal may require a separate PEC licence check before bidding. Do not promise a client that broad memorandum wording settles tender eligibility. Likewise, use the brand clearance guide for a proposed product name instead of assuming the company description protects it.
Preparing a change to the principal activity
Regulations 36–37 provide Form 4 reporting within 30 days of a principal-business change and a special-resolution route without a petition for that change. Other memorandum alterations can follow different routes. Confirm the current requirements against the actual proposed amendment.
| Prepare | Make it specific |
|---|---|
| Old and proposed wording | Show a side-by-side comparison and explain each material change |
| Business evidence | Revenue schedule, asset schedule and sample contracts with sensitive data redacted |
| Permission assessment | Regulator, permission type, status and unresolved questions |
| Corporate papers | Applicable resolution, meeting records and revised memorandum |
| Filing tracker | Event date, calculated due date, owner, submission receipt and recorded outcome |
Review the records that depend on the description
- Ask the preparer to explain why the proposed clause matches the activity evidence.
- Confirm whether the company name also needs attention; use the name-change checklist if it does.
- Compare the final signed papers with the submitted version and retain the outcome.
- Review bank, tax, licence and customer records for activity descriptions that now need correction through their own processes.
A useful first enquiry gives the current activity, the proposed activity and whether trading has begun. You can prepare that summary without sending a full customer list. Seek a focused review if the revenue and asset evidence conflict, the activity is regulated, or an earlier filing describes work the company never performed.
I need a review of my current and proposed business activity and the required company filings. Start with a short summary. Ask for the work scope, required documents and fee before proceeding. Do not send passwords, identity scans or bank statements in the first enquiry.
Sources
This guide is written against the official and clearly labelled professional references below. Rates, thresholds and portal procedures change between reviews, so open the primary source before relying on a figure.
- SECP: incorporation FAQs, September 2025 PDF
- SECP Companies Regulations 2024 — consolidated through 25 July 2025; reviewed PDF April 2026
- Companies Act 2017 — Pakistan Code consolidation updated 7 October 2022
Questions people also ask
Can I copy another company’s object clause?
Use your own activity evidence. Another business may have different permissions, products and constitutional history.
Does a new product always require changing principal business?
Assess whether it changes the principal activity and the filed wording. Prepare its revenue, asset and operational significance for review.
Does Form 4 grant a sector licence?
Treat the corporate filing and any operating permission as separate matters. Ask for the relevant regulator’s evidence.
What if my main activity is still only planned?
Separate current operations from forecasts, document the intended start, and have the wording and change timing reviewed.
Send the tax year and the transaction or filing involved, and we will tell you what is actually required.
Talk to Chartered Advisory Open the tax calculators