A partnership company is a popular business structure in Pakistan for individuals who want to jointly operate a business with shared profits, responsibilities, and risks. It offers more flexibility than a company limited by shares and is simpler to set up and manage compared to a private limited company. Partnership businesses in Pakistan are governed under the Partnership Act, 1932, and registration is carried out through the Registrar of Firms at the respective District Registrar Office under the provincial Industries or Labour Departments. Although registration of a partnership firm is not mandatory, it is strongly recommended for securing legal rights, enforcing contracts, and gaining access to banking and regulatory facilities. This article provides a step-by-step guide on how to register a partnership company in Pakistan, covering legal requirements, documentation, taxation, and post-registration compliance.
What is a Partnership Firm?
A partnership is a business arrangement where two or more individuals share ownership and management of a business and agree to share its profits and losses. Under the Partnership Act, 1932, a partnership is defined as “the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.” The agreement among the partners is documented in a Partnership Deed. In a registered partnership, the firm enjoys legal recognition, which allows it to file lawsuits in its name, open bank accounts, and contract with clients and vendors.
Types of Partnerships
-
General Partnership: All partners share management responsibilities and are jointly liable for business obligations.
-
Limited Partnership (LP): Some partners have limited liability and do not participate in day-to-day management. Not common in Pakistan under current legal provisions.
-
Limited Liability Partnership (LLP): Registered with SECP and governed by the LLP Act, 2017. This is a separate structure from a traditional partnership and is not covered under the Registrar of Firms.
Key Features of a Traditional Partnership Firm
-
Minimum of 2 and maximum of 20 partners
-
Formed under a partnership agreement (Partnership Deed)
-
No separate legal identity from its partners
-
Unlimited liability of partners
-
Governed under the Partnership Act, 1932
-
Registered with the Registrar of Firms at the district level
Benefits of Registering a Partnership Firm
-
Simple and cost-effective to form
-
Shared responsibility and diverse expertise
-
Fewer regulatory requirements than a company
-
Enables opening of bank accounts and contracts in the firm’s name
-
Legally recognized for dispute resolution and government compliance
Step-by-Step Guide to Registering a Partnership Company in Pakistan
Step 1: Choose a Business Name
The partners must select a suitable name for the partnership firm. The name should not:
-
Resemble any existing registered business
-
Include restricted words such as “limited,” “incorporated,” “company,” “government,” or “federal”
-
Be misleading, unethical, or offensive
There is no formal name reservation process for partnerships, but it is advisable to do a basic market check and avoid names that could lead to trademark conflicts.
Step 2: Draft the Partnership Deed
The Partnership Deed is the most important document for registration. It governs the relationship between partners and contains:
-
Firm name and business address
-
Nature of business
-
Full names and CNICs of partners
-
Capital contribution by each partner
-
Profit and loss sharing ratio
-
Roles and responsibilities of partners
-
Rules for admission or removal of partners
-
Banking and financial management protocols
-
Dispute resolution mechanism
-
Duration of the partnership (if fixed or perpetual)
The Partnership Deed must be printed on stamp paper of appropriate value (usually Rs. 1000) and signed by all partners in the presence of witnesses.
Step 3: Prepare Required Documents
The following documents must be prepared for submission to the Registrar of Firms:
-
Duly attested Partnership Deed (in original and two photocopies)
-
Form I (Registration Application Form) available at the Registrar’s Office or provincial department website
-
CNIC copies of all partners
-
Recent passport-sized photographs of all partners
-
Proof of business address (rent agreement or ownership documents)
-
Utility bill of the business premises (electricity, gas, or water)
-
Affidavit on stamp paper verifying the accuracy of provided information
-
Bank challan or treasury receipt for payment of registration fee
Some registrars may also require No Objection Certificate (NOC) from the property owner or local authorities.
Step 4: Submit Documents to the Registrar of Firms
Submit all the above documents to the Registrar of Firms in the respective district where the business is located. The office is usually part of the Industries Department, Labour Department, or Small Industries Corporation depending on the province. The process may vary slightly between:
-
Punjab: Directorate of Industries
-
Sindh: Labour & Human Resource Department
-
Khyber Pakhtunkhwa: Small Industries Development Board
-
Balochistan: Directorate of Industries
Step 5: Pay the Registration Fee
Pay the prescribed registration fee through a government bank (e.g., National Bank of Pakistan) and submit the original challan with your application. The fee varies by province and business capital but is generally Rs. 500 to Rs. 2000. Some offices may require an e-payment slip or bank draft. Always retain the receipt for future reference.
Step 6: Physical Verification (if applicable)
In some districts, a physical inspection of the business premises may be carried out by a field officer before approval. The officer verifies:
-
The business address
-
Presence of partners or staff
-
Display of the firm’s name
This step is more common in urban centers and depends on local regulations.
Step 7: Issuance of Certificate of Registration
If all documents are in order and the Registrar is satisfied, your firm will be registered, and you will be issued a Certificate of Registration of Firm. The certificate includes:
-
Name of the firm
-
Registration number
-
Date of registration
-
Names of partners
This certificate is proof of the firm’s legal existence and can be used for bank account opening, licensing, contracts, and legal matters.
Step 8: Register with the Federal Board of Revenue (FBR)
Once your partnership is registered with the Registrar of Firms, you must obtain a National Tax Number (NTN) for the firm from the FBR.
Steps include:
-
Visit https://iris.fbr.gov.pk
-
Create a business profile for the firm
-
Submit Form 181 for business registration
-
Attach scanned copies of:
-
Registration certificate
-
CNICs of partners
-
Partnership Deed
-
Business address proof
-
Utility bill
-
-
FBR may conduct online or physical verification
Once verified, download your NTN certificate from your IRIS account.
Step 9: Sales Tax Registration (if applicable)
If the partnership provides taxable services (e.g., legal, IT, marketing) or deals in taxable goods, it must register for Sales Tax.
-
For services: Register with PRA, SRB, KPRA, or BRA
-
For goods: Register with FBR under the Sales Tax Act, 1990
Sales Tax registration requires additional documentation, such as bank account details, pictures of premises, and authorized signatory data. After registration, the firm must file monthly sales tax returns.
Step 10: Open a Business Bank Account
To operate financially, open a business bank account in the firm’s name. Most banks require:
-
Certificate of Registration
-
Partnership Deed
-
NTN certificate
-
CNICs of partners
-
Partnership letterhead and rubber stamp
-
Board resolution or letter of authority (signed by all partners)
Step 11: Maintain Compliance
After registration, a partnership firm must ensure:
-
Timely filing of income tax returns
-
Deduction and deposit of withholding taxes where applicable
-
Filing of sales tax returns (if registered)
-
Maintenance of income and expense records
-
Updating Registrar of Firms about changes in the partnership (retirement, admission, or dissolution)
Failure to comply may result in fines, removal from tax authorities’ Active Taxpayer List (ATL), or inability to file future returns.
Optional: Register with Chamber of Commerce
While not mandatory, registration with the relevant Chamber of Commerce and Industry enhances the firm’s credibility. It helps in:
-
Accessing trade fairs and exhibitions
-
Participation in government tenders
-
Business networking and capacity building
Requirements usually include: -
Registration certificate
-
NTN
-
Utility bill and rental agreement
-
Bank certificate or account statement
-
Application form and annual membership fee
Dissolution of Partnership
A partnership may be dissolved voluntarily (mutual consent) or involuntarily (death, insolvency, or dispute). Upon dissolution:
-
Notify the Registrar of Firms using the prescribed form
-
Settle liabilities and distribute remaining assets
-
Cancel NTN and tax registrations
Common Mistakes to Avoid
-
Using a business name that implies corporate status (e.g., Pvt Ltd)
-
Operating without registering with FBR and tax authorities
-
Not updating records upon partner changes
-
Failing to file tax returns, even in loss years
-
Not maintaining proper accounts or receipts
Conclusion
Registering a partnership company in Pakistan is a relatively straightforward process that offers numerous benefits for small and medium-sized businesses. While the law does not mandate registration, doing so grants legal protection, enables access to banking and credit facilities, and enhances commercial credibility. By following the correct procedures—drafting a sound partnership deed, filing documents with the Registrar of Firms, obtaining tax registration, and complying with regulatory requirements—you can establish a solid legal foundation for your business venture. It is always advisable to consult a legal or tax expert for proper guidance and compliance, especially in matters involving profit-sharing, liability clauses, and taxation.
