License under Section 42 of the Companies Ordinance, 1984
Any three or more persons associated for lawful purpose may by subscribing their names to the memorandum and Articles of association and complying with the requirement of companies ordinance, 1984 and companies general provisions and form rules 1985 form a company. A not-for-profit association (also called an NGO or NPO) may be registered as company under the provisions of the Companies Ordinance, 1984. A not-for-profit association applies its profits or income in promoting its objects only and prohibits the payment of any profits, income, dividend or proceeds to its members, this differentiates it from the other type of companies. Any such association is required to obtain licence under Section 42 of the Ordinance read with rule 6 of the Companies (General Provisions and Forms) Rules, 1985 before its registration as a company.
The licence is issued for a period of five (5) years, renewable for further term (s) of five (5) years each. The procedure for obtaining licence, subsequent registration of such association as company limited by guarantee, and thereafter renewal of the licence when due, is provided in the link provided below;