How Does Partnership Company Registration Work in Pakistan?

 General Partnership: In this structure, all partners share equal responsibility for business obligations and debts. Each partner’s personal assets can be used to cover business debts, as the liability is unlimited.

Limited Liability Partnership (LLP): An LLP provides limited liability protection to the partners, meaning their personal assets are protected, and they are only liable for the business's debts up to their investment. LLPs are governed by the Limited Liability Partnership Act of 2017.

The following steps primarily cover the process for general partnership registration under the Partnership Act of 1932.

2. Drafting the Partnership Deed

A Partnership Deed is a legal document that outlines the terms and conditions agreed upon by all partners. This document serves as the foundation of the partnership and includes important details such as:

Names and addresses of all partners

Business name and address

Nature of the business

Profit and loss sharing ratio

Capital contributions of each partner

Roles, responsibilities, and authorities of each partner

Conditions for adding or removing partners

Procedures for dissolution of the partnership

While it is not legally required to register the Partnership Deed with the Registrar of Firms, doing so adds a layer of legal validity to the firm. The deed must be printed on legal stamp paper and signed by all partners to make it official.

Company Registration In Pakistan

3. Registering the Partnership Firm with the Registrar of Firms

The formal Company Registration In Pakistan of a partnership firm in Pakistan is completed by applying to the Registrar of Firms in the respective jurisdiction where the business will operate. 

The following documents must be submitted as part of the registration process:

Application Form: This form includes the name of the partnership, business address, and details of all partners. 

Every partner should sign it.

Partnership Deed: The original deed, signed on stamp paper, should be submitted along with copies of each partner’s National Identity Card (CNIC).

Witness Signatures: The application should include the signatures of witnesses, confirming the authenticity of the partnership agreement.

Once all required documents are submitted, the Registrar of Firms reviews the application and may ask for additional documents or clarifications. Upon approval, the Registrar will issue a “Certificate of Registration,” confirming the partnership as a legally recognized entity. This certificate establishes the partnership's credibility and can be used when opening a bank account or entering into legal contracts.

4. Sales Tax Registration (If Required)

If the partnership firm sells goods or services subject to sales tax, it must also register for sales tax with the FBR. This is particularly relevant for firms with turnover above the specified threshold or those operating in specific industries, such as manufacturing, import/export, or retail. Sales tax registration can also be done through the FBR’s IRIS portal. Once registered, the firm must collect and remit sales tax and submit monthly sales tax returns.

Company Registration In Pakistan

5. Federal Board of Revenue (FBR) registration

After Company Registration In Lahore with the Registrar of Firms, the partnership firm must obtain a National Tax Number (NTN) from the Federal Board of Revenue (FBR). This registration is essential for tax purposes. The process involves creating an account on the FBR’s online IRIS portal, where the firm can apply for an NTN. The application requires information about the business and its partners and may also require documentation, such as the Partnership Deed and Certificate of Registration. The NTN enables the firm to file income tax returns and comply with Pakistan’s tax laws.

6. Opening a Partnership Bank Account

To maintain financial transparency, a partnership firm should open a separate bank account under its registered name. Most banks in Pakistan require the following documents to open a partnership account:

Partnership Deed

Certificate of Registration

NTN certificate

CNICs of all partners

A dedicated business account allows the firm to keep its finances organized, which is helpful for tax compliance and financial management.

Conclusion

Registering a partnership firm in Pakistan is a straightforward process that provides legal standing, credibility, and tax compliance. By creating a Partnership Deed, registering with the Registrar of Firms, obtaining an NTN, and completing any necessary sales tax registration, a partnership can legally operate and build its reputation in Pakistan’s business landscape. This structure is particularly advantageous for small to medium-sized businesses, offering shared control and liability, although partners are fully liable for debts in a general partnership. Hamza & Hamza Law Associates is undoubtedly the best law firm in Lahore. I had never imagined anyone could manage my business issues, taxes and property matters smoothly and timely.

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