How to register a partnership company in Pakistan?

A partnership is a popular and flexible business structure in Pakistan, especially for small and medium-sized enterprises (SMEs) looking to operate jointly under a formal agreement without incorporating as a private limited company. Governed by the Partnership Act, 1932, partnership registration is handled at the provincial level through the Registrar of Firms in each district. Registering a partnership offers legal recognition, protects partner rights, and facilitates access to bank accounts, tax registration, and government contracts. This article provides a complete step-by-step guide on how to register a partnership company in Pakistan.

1. What is a Partnership Firm?

A partnership firm is a business structure formed by two or more persons who agree to share the profits and losses of a business carried on by all or any of them acting for all. The relationship is governed by a Partnership Deed, which outlines the terms and responsibilities of each partner.

2. Legal Framework for Partnerships in Pakistan

Partnerships in Pakistan are regulated under:

• Partnership Act, 1932

• Income Tax Ordinance, 2001 (for taxation)

• Registrar of Firms under each District/Deputy Commissioner’s Office

The structure is most suitable for traders, consultants, freelancers, and SMEs who want flexibility without complex compliance.

3. Types of Partnership Firms in Pakistan

• Registered Partnership – Legally recognized by the Registrar of Firms, has legal standing in court, can open bank accounts, and sign contracts in firm name.

• Unregistered Partnership – Legally allowed but cannot sue in court and has limited credibility with banks and vendors.

4. Key Features of a Partnership Firm

• Minimum of 2 partners; no fixed upper limit (usually 2–20 partners)

• Governed by Partnership Deed

• Easy to start and dissolve

• Not a separate legal entity from its partners

• Partners have unlimited liability

5. Documents Required for Partnership Registration

To register a partnership firm, the following documents are required:

1. Partnership Deed (on stamp paper – signed by all partners)

2. CNICs of all partners

3. Proof of Business Address (utility bill or rent agreement)

4. Affidavit from all partners verifying the business

5. Form-I (Application for registration)

6. Partnership Name (must not be similar to any existing firm)

7. Three passport-size photographs of each partner

8. Paid stamp duty and court fee ticket as per provincial rates

6. Contents of a Partnership Deed

The deed should include:

• Firm name and business address

• Nature of business

• Capital contribution by each partner

• Profit and loss sharing ratio

• Roles and responsibilities of partners

• Banking operations authority

• Admission, retirement, and expulsion clauses

• Dispute resolution mechanism

• Dissolution clause

The deed must be printed on stamp paper (value varies by province and capital contribution).

7. Step-by-Step Process to Register a Partnership in Pakistan

Step 1: Draft the Partnership Deed
Prepare a comprehensive deed covering all legal aspects and roles of partners.

Step 2: Print on Stamp Paper
Print the deed on stamp paper of appropriate value and get it notarized.

Step 3: Fill Form-I
This is the application for registration, available from the Registrar of Firms office or downloadable online in some provinces.

Step 4: Prepare Supporting Documents
Collect CNICs, photos, rent/ownership proof, and business affidavit.

Step 5: Submit Documents to Registrar of Firms
Submit all documents in the Registrar’s Office (at the DC office of your district).

Step 6: Pay Registration Fees
Pay the official fee at the designated bank branch and attach the receipt with your application.

Step 7: Issuance of Certificate of Registration
If documents are complete, the Registrar enters the firm into the Register of Firms and issues a Certificate of Registration.

Timeframe: 7 to 10 working days

8. Post-Registration Requirements

a. NTN Registration with FBR
Apply for a National Tax Number (NTN) via FBR’s IRIS portal under the firm’s name.

b. Sales Tax Registration (if applicable)
If your firm deals in taxable goods/services, register with FBR, PRA, or SRB.

c. Bank Account Opening
Open a business bank account in the firm’s name using:

• Partnership deed

• Registration certificate

• NTN

• CNICs of partners

• Account opening resolution (optional)

d. Maintain Books of Accounts
As an Association of Persons (AOP), your firm must maintain proper books for audit and tax filing.

9. Taxation of Partnership Firms in Pakistan

Under the Income Tax Ordinance, 2001:

• A partnership is taxed as an AOP (Association of Persons)

• Income is calculated at the firm level, and the firm files a tax return

• Profit is distributed to partners, who also declare their share in personal returns

• Tax Rate: Progressive tax slabs apply to AOPs (starting at 7.5% and going up to 35%)

10. Benefits of Registering a Partnership

• Legal recognition and ability to sue/be sued

• Ability to open a bank account in firm name

• Eligibility for government tenders and contracts

• Easier access to business loans and financing

• Structured agreement between partners

• Tax advantages compared to sole proprietorship

11. Common Mistakes to Avoid

• Choosing a name similar to an existing firm

• Using an incomplete or vague partnership deed

• Not defining roles and profit-sharing properly

• Missing court fee or submitting unstamped documents

• Not registering the firm (leaves it without legal status)

12. Comparison: Partnership vs Private Limited Company

13. How Sterling.pk Helps

At Sterling.pk, we offer complete support for partnership registration in Pakistan:

• Drafting partnership deed

• Preparing and submitting Form-I

• Handling documentation and stamp duty

• Registrar office processing

• NTN and sales tax registration

• Post-registration bank and tax setup

Whether you’re a small trader, consultancy firm, or logistics partnership—we ensure your registration is done right and fast.

Conclusion

Registering a partnership company in Pakistan is simple, cost-effective, and ideal for small businesses that want to operate jointly without complex compliance. However, to avoid delays and legal complications, it’s important to follow the correct procedure, draft a comprehensive partnership deed, and register with all relevant authorities including SECP (if incorporated), FBR, and provincial bodies. With expert guidance from Sterling.pk, your business can be legally structured, tax-compliant, and bank-ready within a matter of days