COMPANY / FIRM REGISTRATION:
Previously, we wrote about the Company Registration process in Pakistan. Firm Registration process in Pakistan ’. As always, there are a few business jargon that you may need to have a clear understanding on, before we embark onto registration procedures. To help you out, we’ve briefed few terms along with.
Partnership as stated in the Partnership Act 1932, defines it in the following terms:
“the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.” Minimum two and maximum twenty persons in any partnership business mutually decide to run a business collectively where they
- Share responsibilities
- Pay taxes
- Divide the work
- Share every loss or profit
Three types of Partnerships:
-
Ordinary Partnership
In accordance with OP, partners are jointly and unlimitedly liable for the obligations of the partnerships. Each partner must bring some contribution in form of money other valuable properties or services. -
Limited Partnership
In this kind of partnership, one or more partners have limited liability and at least one among the partners has unlimited liability. The liability of the limited partner is limited to the extent of his investment in the business -
At-will Partnership
it is the most advantageous in terms of its indefinite period feasibility. Partnership at-will doesn’t require time duration and can be dissolve any moment the partners see fit. An ordinary partnerships turns into a partnership at-will under the following conditions: - If the partnership is of an indefinite period
- If the partnership is formed for definite period of time and the firm continues to function after the expiry period
- If a partnership is formed to conduct a particular venture and continues to function after the accomplishment of venture.
Procedures involved in registration of Partnerships:
Partnership registration is not compulsory by any law but it is better to do so if individuals have agreed to work jointly. A partnership may be registered with the Registrar of Firms of an area where the office of the firm is located or proposed to be situated. In order to register business as partnership minimum two persons and following information is required:
Requirements:
- Each person’s – Full Name, Father or Husband Name, Residential Address and Occupation.
- Copy of the National Identity Cards of each partner.
- Partnership deed on stamp paper is also required.
- Proof of the address of partnership business, usually utility bills – could be of electricity.
- If the address of the partnership business is rented then rent deed is required
- Copy of the original receipt of Partnership fee deposited in the National Bank of Pakistan.
- Signature of all the partners in partnership\firm business in presence of a registrar or an authorized officer.
Additional Requirements:
- National Tax Number from Federal Board of Revenue.
- Bank Account in the name of Business.
- Accounting records of the partnership business, a properly maintained profit and loss account and balance sheet.
- Advance payment of Income Tax.
- Registration from any other authority if required under any law of business to be undertaken.
Partnership deed: in other words, a partnership agreement is a document signed by all partners which consists of mutual rights, obligations, regulations and conditions concerning the internal management of partnership organization.
Dissolution deed: occurs when firm is dissolved by mutual consent of partners. A deed of dissolution is required and need to be registered. It should clearly mention debts and liabilities. The dissolution deed provides the valuation of assets including goodwill and distribution of same amongst the partners.
So, now you’ve got the know-how of partnership registration process in Pakistan. If you’re looking for information on any subject or area, let us know in the comments section below. We’ll sure come up with some more helpful guides.