In 2017, Securities and Exchange Commission of Pakistan (SECP) introduced a new business structure in Pakistan. Earlier we have had following business entities in Pakistan though which a business could have been registered:
- Sole Proprietorship
- Partnership firm
- Private Limited Company
If you want to know which business entity suits you it is recommended that you call our expert lawyers for free consultation or you can also use the link below:
WHAT ARE DIFFERENT WAYS TO ESTABLISH BUSINESS IN PAKISTAN?
SECP introduced however, a new structure in shape of Limited Liability Partnership (LLP) to start-ups and other established businesses to shape up their business to their best advantage. In order to register a partnership firm (AOP), rights and obligations of each party are fully defined and agreement is drafted to offer maximum protection to partners. In majority of cases entrepreneurs are more suited to register a Partnership Firm (AOP) as rights and obligation to their special need a drafted to offer maximum protection from future disputes that may arise during the court of prospective business but the biggest disadvantage that it carry is that liability of partners become same as that of Partnership firm (AOP). This means that partnership firm (AOP) and partners are no different in terms of liability of partnership business. For example in satisfaction of decree of court in favor of person in relation to some liability against Partnership Firm (AOP), each partner solely and jointly becomes fully liable to satisfy the decree. Assets of partners as well as that of partnership firm (AOP) can be attached and liquidated by Court to satisfy the decree in favor of the creditors. This is where the Limited Liability Partnership (LLP) comes to rescues those who wish to limit their liability in partnership business.
Limited Liability Partnership (LLP) structure is a separate legal entity from its partners and liability of each partner is limited to extent of his/her share in Partnership business. For taxation purposes, however, Limited Liability Partnership (LLP) enjoys similar benefits as that offered to Partnership firm.
Procedure to Register a Limited Liability Partnership in Pakistan
Procedure for registration of Limited Liability Partnership (LLP) is regulated by Security Exchange Commission of Pakistan (SECP). Procedure for Limited Liability Partnership (LLP) is explained below:
Step 1: Registration with SECP (Eservices Portal)
This first process is to get registered with Eservices SECP by entering your cnic details. Once the details are entered, SECP sends your pin codes on both email and mobile registered in your name.
Step 2: Name Availability
Once you are registered in SECP Eservices, name you chose for your Limited Liability Partnership (LLP) shall be applied with SECP on a prescribed format. SECP after inspection, reserves the name for period of 30 days in which incorporation of Limited Liability Partnership (LLP) is to be processed and finalized.
While choosing a name for your Limited Liability Partnership (LLP) it is important not use certain prohibited words including words which are deceptive, inappropriate, undesirable or similar to names already registered for some other corporate, governmental, semi-governmental or private entity in Pakistan or elsewhere.
Step 3: Process of filing documents with SECP
After the name is reserved by SECP, documents required for registration of Limited Liability Partnership (LLP) are to be processed and finalized for purpose of submission with SECP in a prescribed form and manner. Documents required for registration are as follow:
- Duly filled in Form III
- LLP agreement duly executed by each partner, witnessed and notarized by licensed Notary Public;
- Name Availability letter issued by SECP
- National Identity Card of each partner and designated partner
- Consent of designated partner authorized by any local or foreign entity
- In case of foreign partner, copy of passport
- Payment of registration fee as prescribed by SECP
Letter of authority in favor of person submitting and receiving documents on behalf of partners
Upon submission of documents, SECP within 2 week time process the application for registration and issue certificate of incorporation until any objection is ordered, in which case objection shall be required to be removed in order to obtain incorporation Certificate from SECP.
Our specialized team of lawyers have expert experience in registration and incorporation of different entities. Over the period of 12 years we have developed great professional reputation in the business market. It is because we are not only fully equipped with law but we also fully understand your concerns and handle the matter without you worrying about the process.