HOW TO REGISTER A SOLE PROPRIETORSHIP IN PAKISTAN?
The decision to choose the beneficial type of establishment is completely based on the particular nature of business as every sector has its own benefits and drawbacks. While choosing the right type of establishment for any business sector, some major factor that need to be considered including Tax benefits and exemptions on a particular sector, loan finance requirements, legal benefits and impediments, scope and object of business, flexibility of operations and other underlying factors.
What is Sole Proprietor?
80% of the businesses in Pakistan are opened as Sole Proprietor. It is termed as a simplest type of business establishment or entity for doing business in Pakistan. It is also referred to as Proprietor concern or a Proprietorship concern. Sole Proprietorship Registration process is very simple. However, it is noteworthy that there are different types of Business entities in Pakistan. Each entity has a different structure, requirement and even the benefits from choosing from the type of entity may be significantly different. Any person willing to have Sole Proprietorship Registration may easily choose to do so but it is important that that there is only one person operating or managing the Sole Proprietorship business. Sole Proprietorship Registration makes liability of its owner unlimited. After Sole Proprietorship Registration there is no difference between liability of the owner and that of the Sole Proprietorship Business. Consequent to the Sole Proprietorship Registration, Sole Proprietor shall alone run the business affairs and is responsible for all business’s debts, losses and liabilities in personal capacity. This also means that Sole Proprietor shall not be required to file a separate return for his Sole Proprietor Business. He is required to declare his business income in his personal return. Sole Proprietorship Registration for its easy Start-up process and for its cheap capital requirement is considered favorable by beginners and especially fresh graduates who desire to register a business entity in Pakistan.
A step to step process on Sole Proprietorship Registration in Pakistan.
In order to have Sole Proprietorship Registration all you need to do is:
- Choose a name for your business/ Sole Proprietorship.
- In order to apply for Sole Proprietorship Registration you must have a National Tax Number (NTN) to be issued by FBR. You will only recieve a NTN certificate with your name & details on it.
- Make letterhead and business card for your Sole proprietorship business with name, logo, phone number and physical office address of your business on it.
- File request on the letter head signed and stamped along with your cnic and business card with bank of your choice for opening business account of your Sole proprietorship Business.
- Get issued a maintenance certificate from the bank after your account is opened.
- After your account is opened you can also register for Sales Tax (GST).
Hamza and Hamza Law Associates has been providing legal assistance in Sole Proprietorship Registration for the last 10 years. In case if you have any concern or query in Sole proprietorship Registration, please feel free to contact the firm.
Documents we require:
- cnic copy of sole proprietor
- Nature of business
- Business letterhead
- Electricity bill
- Rent agreement of office
- Mobile number of Sole proprietor that is not already registered with FBR
- Email address of Sole proprietor that is not already registered with FBR.
HOW TO REGISTER A PARTNERSHIP FIRM IN PAKISTAN ?
You can opt to register a Partnership Firm or Business in Pakistan. Partnership is provisioned and regulated under the Partnership Act, 1932. Owners of the Partnership Firm or Business are usually referred to as Partners. Minimum of 2 partners are required to operate, manage and run the affairs of Partnership Firm or Business. Partnership Firm or Business is usually recommended for persons who for a specific purpose, object and period are desirous to establish an entity. Consequent to the purpose or object having being achieved or the period for which the entity is required to be established is meted out, can eventually dissolve the same.
Process of Partnership Firm Registration requires to execute a Partnership Agreement, wherein terms and conditions of Partnership including amongst others ; term, scope; object; shares of respective partners; mode and time for sharing of profit etc. is expressly chalked out. Just like every other agreement partners expressly reduce into writing their rights and obligations against the other partners.
Process of Partnership Firm Registration requires an application to be submitted to the respective District Registrar Firms in whose jurisdiction Partnership Firm is being established. Process of Partnership Firm Registration requires for submission of following documents:
- Partnership deed executed on non-judicial stamp worth Rs. 1,000/- (name of Partnership Firm and Address must be mentioned along with all rights and obligations of the parties against each other and any third parties) attested by atleast 2 witnesses as prescribed under the law.
- Filled form I
- Bank challan of prescribed Registration fee
- CNIC copies of all partners along with CNIC of all witnesses.
- Copy of all the above documents duly notarised by a notary public.
- Partners may have to physically appear before the Registrar Firms if required by him.
Registrar Firm process the application within 7 days after the application along with foregoing documents for Partnership Firm Registration is filed with Registrar Firms.
We at Hamza and Hamza Law Associates assist our valued clients in process for Partnership Firm Registration before the Registrar Firms. We understand the concern of our valued clients and draft the partnership agreement to cover all the affairs of the partnership business and to secure the interest of our client in the venture to avoid any stringent disputes in future that may subsequently arise between the partners of the partnership firm. We on behest and sake of our client negotiate the terms and conditions of the partnership with the other partners.
Documents we require:
- Proposed name of your firm
- Nature and scope of business
- Full name and CNIC copies of partners
- Full name and CNIC copies of witnesses
- Investment amount by each partner
- Partnership Deed on non-judicial stamp paper worth Rs. 1,000/-
- Office address of the Partnership Firm
You can contact us in case if you have any queries or questions regarding the process of partnership firm registration or if you are desirous to secure your interest in the partnership business.
HOW TO REGISTER A PRIVATE LIMITED COMPANY IN PAKISTAN ?
Why to register a Company?
We at Hamza and Hamza based on the requirements of business in the emerging markets of Pakistan often assist our clients in company registration in Pakistan. Registration of Private Limited Company has some major benefits over other types of business establishments.
Step to Step Procedure for Registration of Private Limited Company in Pakistan:
- E-services registration
As a first step you have to register your account on E-service portal regulated by Security Exchange Commission of Pakistan. It is a simply process that registers you credential with basis information like your cnic number, mobile number and email. In case if you are a foreign national in Pakistan you will additionally be required to provide you passport information along with foregoing information and a photograph. After you have successfully signed-up, two separate pins both at your phone number and email shall be received for verification purposes. Following the verification process you will receive a unique PIN to sign the forms and submit them to SECP.
2. Apply for availability of name
For the purpose of company registration in Pakistan the first phase is to apply for the name of the company. You cannot simply be allowed a name which is already registered with SECP or is already in use. So to ensure that the name of business you wish to register is not already in use, you can search the name on SECP website at Company name search. If no results are found on SECP this means that name is available for purpose of company registering – business registration in Pakistan and you can request for reservation of that name for yourself.
3. Company Name Reservation
After the name is applied with SECP and such name is available with SECP, same will be reserved for a period of 60 days for you to start the Company registration process. The name reservation form is required to be filed online after you login into E-services.
4. Memorandum of Association
Memorandum of Association is the charter of a company. It serves as the charter of the company being registered. It not merely spells out the vision, scope and mandate of the company but also discloses the detail particulars of its shareholders and the composition of shares each shareholder or subscriber enjoys in the business amongst others. Memorandum of Association is filed along with application for company registration in Pakistan.
5. Articles of Association
Articles of Association on the other hand is termed as the constitution of the company. It provides the provisions on internal operations to be carried out on daily basis etc. of the company. It further provides with the provisions to appoint Chief Executive, Directors, secretary etc of the company. Article of Association is also filed along with application for company registration in Pakistan.
6. Submission of Forms
Process of Company Registration in Pakistan can be applied both online and offline. For a paper-free environment it is highly recommended by SECP to file applications online. Process of online company registration in Pakistan is being promoted by SECP and is followed by 50% fee concessions. For online process for Company Registration requires filing joint application for name availability and company registration. if required you can also separately file applications for both phases online. Application of company Registration is to be accompanied by Memorandum of Association, Article of Association and the application for name availability using E-services portal. In that case all fees payable can be paid online using credit card or online banking.
In case of offline method for filing application for company registration in Pakistan you are required to generate challan manually and after making payments same shall be manually filed along with the signed application and the foregoing documents with SECP.
7. Processing Time
SECP has recently revamped the process of company registration in Pakistan for which new and convenient procedure has been introduced. The process for company Registration therefore, has become advanced and expeditious. Applications are now process within a few hour so you do not have to wait a week or a month any more for registration of your new business.
Benefits of Company Registration in Pakistan
Company registered in Pakistan in also termed as a limited liability company. This means that affairs of the directors or subscribers are different from that of the affairs of the company. Directors or owners of the company cannot be personally held liable for the affairs of the company or its liability. Registered company in Pakistan is an artificial person, a corporate body with separate legal entity and a perpetual succession with unlimited life. Registered company is not dissolved upon death of its subscribers, stakeholders or employees as the case may be.
Owners of the company can sell their interest in company to any third person or party and can be easily transferred to another person after a resolve by the Board in its annual general meeting and consequently with approval of SECP.
Company is the most organized structure considered amongst all the entities established in Pakistan. Government of Pakistan in pursuit to develop and promote documented economy has introduced several tax benefits, concessions and rebates for start-up businesses. Most of these benefits are merely available only when the business is registered as a company in Pakistan. Even tax rates for companies are far lesser than other business and almost all the business expenses are deductible subject to procedural compliances provided by law if any.
It is interesting that SECP is the regulator of company and in case if a management dispute arises between the directors or shareholders, parties without resorting to the court for resolution of their dispute can opt for summary procedure for resolution of dispute by filing representation before SECP which is adjudicated under the process of Companies Act 2017.
At Hamza and Hamza Law Associates we have profound experience of assisting in process of company Registration in Pakistan. In case if you have any queries feel free to contact us.
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