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.