Introduction
Starting a business in Pakistan requires careful consideration of the appropriate legal structure. A partnership company offers a flexible and viable option for entrepreneurs seeking to collaborate and share resources. This guide provides a detailed overview of the process of registering a partnership company in Pakistan.
Definitions
Partnership Company:
A partnership is a business entity formed by two or more individuals who agree to carry out a business venture together and share profits, losses, and responsibilities.
Partners:
Partners are the individuals who own and manage the partnership company.
Partnership Deed:
A partnership deed is a legally binding agreement that outlines the terms and conditions of the partnership, including profit sharing ratios, responsibilities, decision-making procedures, and dispute resolution mechanisms.
Registrar of Firms:
The Registrar of Firms is the government authority responsible for maintaining records of partnership companies and overseeing the registration process.
Process:
Registering a partnership company in Pakistan involves several steps and procedures. Here is a detailed guide on how to register a partnership company in Pakistan:
Step 1: Select a Suitable Name
Choose a unique and appropriate name for your partnership company. Ensure that the name is not already in use by another company and does not violate any legal restrictions.
Step 2: Prepare a Partnership Deed
A partnership deed is a legally binding agreement that outlines the terms and conditions of the partnership. It should include the following information:
Name and address of the partnership company
Names, addresses, and contact details of all partners
Nature of the business
Capital contributions of each partner
Profit and loss sharing ratios
Roles, responsibilities, and authorities of each partner
Decision-making procedures
Dispute resolution mechanisms
Step 3: Obtain a National Tax Number (NTN)
Partnerships are required to obtain a National Tax Number (NTN) from the Federal Board of Revenue (FBR). You can apply for the NTN by submitting the partnership deed, along with copies of partners’ national identity cards and proof of address, to the nearest Regional Tax Office (RTO) or Tax Facilitation Center (TFC).
Step 4: Register with the Registrar of Firms
Visit the office of the Registrar of Firms, which is usually located in the district courts, to register your partnership. Follow these steps:
Obtain the prescribed partnership registration form (Form I) from the Registrar’s office or download it from their official website.
Fill out the form with accurate information, including the partnership name, address, names of partners, and their capital contributions.
Submit the completed form along with the following documents:
Partnership deed (original and photocopies)
Copies of partners’ national identity cards
Affidavits of partners (stating their consent to become partners)
Bank challan/receipt as proof of payment of the registration fee
Pay the registration fee, which is based on the capital contribution of the partnership.
The Registrar will review the documents and, if satisfied, issue a Certificate of Registration. This certificate serves as proof of the partnership’s legal existence.
Step 5: Open a Bank Account
Once you have obtained the Certificate of Registration, open a bank account in the name of your partnership company. Provide the bank with the necessary documents, including the Certificate of Registration, partnership deed, and partners’ identity cards.
Step 6: Register for Sales Tax (if applicable)
If your partnership company’s annual turnover exceeds the threshold set by the FBR, you may need to register for sales tax. Consult with a tax professional to determine your sales tax obligations and complete the registration process.
Step 7: Obtain any Additional Permits or Licenses
Depending on the nature of your business, you may need to obtain additional permits or licenses from relevant authorities. Examples include trade licenses, health and safety permits, environmental permits, etc. Research the specific requirements for your industry and comply accordingly.
ExamplesÂ
To illustrate the concept of a partnership company, consider the following examples:
Ali and Ahmed start a restaurant business together, sharing investment costs, management responsibilities, and profits.
Sana and Fatima establish a fashion boutique, pooling their resources and expertise to create a successful retail venture.
Kamran and Tariq form a construction company, combining their construction skills and capital to undertake projects.
Case Studies
Case Study 1: Ali and Ahmed’s Restaurant Partnership
Ali and Ahmed decide to open a restaurant in Lahore. They draft a partnership deed specifying the investment contributions, profit sharing ratios, and roles and responsibilities of each partner. They visit the Registrar of Firms office with the necessary documents, including the partnership deed, national identity cards, and address proofs. The Registrar verifies the documents and registers their partnership company, issuing a Certificate of Registration.
Case Study 2: Sana and Fatima’s Fashion Boutique Partnership
Sana and Fatima plan to launch a high-end fashion boutique in Karachi. They consult a lawyer to draft a partnership deed that outlines their respective investments, profit sharing ratios, and decision-making procedures. They compile the required documents, such as the partnership deed, identity cards, and proof of address, and submit them to the Registrar of Firms. The Registrar reviews the documents and grants them the Certificate of Registration, officially recognizing their partnership company.
Conclusion
Registering a partnership company in Pakistan involves drafting a partnership deed, submitting the necessary documents, and obtaining a Certificate of Registration from the Registrar of Firms. Partnership companies offer numerous advantages, including shared responsibilities, flexible decision-making, and shared profits and losses. It is crucial to consult legal professionals to ensure compliance with relevant laws and regulations. By following the outlined process, aspiring entrepreneurs can establish successful partnership companies in Pakistan and embark on their entrepreneurial journey with confidence.
