Partnership Registration: Partnership Deed & Business Partnership Firm, Partnership Act 1932
Partnership Firm Registration in Pakistan & Our Services in Karachi, Islamabad & Lahore
Partnership Registration in Pakistan | Partnership Deed | Partnership Act 1932
Types of Partnership Firms & Partnership Registration Process
Partnership Registration in Islamabad & Provincial Registrars in Karachi, Sindh and Punjab Provinces Requirements For Partnership Firm Registration in Pakistan
PARTNERSHIP REGISTRATION: Partnership Deed & Business Partnership Firm, Partnership firm registration, partnership deed/agreement, types of Partnership and other topics will be discussed here.
For partnership registration you require a partnership deed/agreement to form a partnership firm, according to the Partnership Act 1932. There are several types of partnerships in Pakistan. We draft a partnership deed for your partnership firm and then submit it to the Registrar of firms, for partnership registration in Islamabad, Karachi, Lahore, Rawalpindi, Peshawar or any other city of Pakistan..
We shall try to provide detailed info about the partnerships, partnership Act 1932, types of partnerships, partnership deeds, partnership firms, partnership registration in Islamabad, Provincial Registrars of Partnership Firms in Karachi, Sindh, and Punjab Provinces, Requirements For Partnership Firm Registration in Pakistan and process of partnership firm registration by yourself or through a corporate lawyer.
Provincial Tax Authorities
Disclaimer: All information is provided on this portal solely for informational purposes. This portal is not affiliated with the Government website. Please note that this disclaimer also applies to our website, and we may refer to it as ‘us’, ‘we’, ‘our’ or ‘website’. The information on the website has been gathered from various government and non-government sources. We disclaim any liability for errors, injuries, losses, or damages arising from the use of this information. We also disclaim any liability for the availability and authenticity of this information. Our services consist of filling out forms, providing legal advice, and assisting our clients. The departmental processing of the registration forms is not our responsibility. You will have to use a service fee for professionally preparing your application, submitting it to the relevant authorities, and coordinating your application process. You will have to pay any Government fees.
What is a Partnership Firm or Business Partnership?
Definition of Partnership Business
Partnerships are businesses in which two or more people agree to be co-owners, share responsibilities for running an organization, and share income and losses.
A Partnership business is defined as, a trade or business established with a distinct business name, to earn profits, by two or more persons, who have agreed to jointly invest their money or expertise or efforts, work for their joint business, and share the earnings of a business. Its type of business contains its own pros and cons; it’s primarily suitable for small-size startups. Two or more people agreed to share the excess of a business carried on by all or any of the partners, for all shareholders, can be named as a partnership business. Various small and medium-sized businesses can utilize it as a general model of operation.
Partnerships in Pakistan are Regulated By Partnership Act, 1932
Partnerships in Pakistan are governed by ‘The Partnership Act of 1932’. Specifically, a partnership is an association of two or more parties who agree to share the profits generated by the business under their supervision or on behalf of other partners.
Partnership Features Include:
A partnership consists of the following features:
1. Partnership By Agreement: The partnership is formed by a partnership contract or a partnership agreement (which is also called as a partnership deed) between two or more individuals. As a result of the agreement (accord), the partners become associated. Usually, such agreements are in writing. There is no difference between an oral agreement and a written agreement. The written agreement should always be available to the partners so that controversies can be avoided.
2. More than One Person: A partnership must consist of at least two people who share a common goal. Thus, two partners are the minimum number for an enterprise.
3. Profit Sharing: Another important aspect of a partnership is the agreement between partners to share profits and losses. An agreement between people to share the gains of a business is described as a partnership in the Partnership Act. The sharing of loss is implied. Thus, it is important to share profits and losses.
4. Business Motive: Business should be carried out by a firm and profit-making should be the motive.
5. Mutual Business: Partner firms are owned and managed by their partners. The actions of one partner can affect the actions of other partners and the firm as a whole. In conclusion, this point serves as a test of partnership for all parties involved.
6. Unlimited Liability: Partnerships have unlimited liability for each partner.
Types of Partnership Firms in Pakistan
There are different types of partnerships depending on the state and the location of the business. There are three main types of partnerships, each with its own general characteristics.
General Partnership Firms
The general partnership consists of two or more owners who run the business together. Each partner has equal rights to represent the firm in this partnership. Partners have the right to control the business, participate in management activities, and make decisions. It is also equally shared and divided when it comes to profits, debts, and liabilities.
Therefore, general partnerships are those in which management and decision-making rights and responsibilities are equally divided. Partners should be fully responsible for each other’s debts and liabilities. In the event of a lawsuit against one partner, all of the other partners are considered liable. Partners’ personal assets will be held by a creditor or court. This partnership is therefore not preferred by most partners.
- Partnership at Will
According to section 7 of the Partnership Act 1932, for a company to become a Partnership at Will, it must fulfil the following two conditions:
- There should be no fixed expiration date in the partnership agreement.
- There should be no mention of the partnership’s specific determination.
A partnership at will cannot be formed if the duration and determination are not stated in the agreement. The firm will also be considered a partnership at will if, initially, it had an expiration date, but its operations continued after that date.
Limited Partnership Firms
In a limited partnership, partners have unlimited liability and manage the business and other limited partners. In a limited partnership, each partner has a limited amount of control over the business (limited to the amount they invested). The firm’s everyday operations are not handled by them.
In most cases, the limited partners only invest and take a profit share. They do not have any interest in participating in management or decision-making. This non-involvement means they do not have the right to compensate the partnership losses from their income tax return.
Limited Liability Partnership Firms
A Limited Liability Partnership (LLP) limits the liability of all its partners. The partners are protected from the legal and financial mistakes of their fellow partners. Limited liability partnerships are similar to Limited Liability Companies (LLCs), but differ from limited partnerships and general partnerships. Such types of partnership firms are registered and regularised by the SECP.
What is a Partnership Deed?
A partnership deed is a partnership agreement between the firm’s partners that outlines the terms and conditions of the partnership between the partners. Partnership deeds ensure the smooth running of the firm’s operations by clearly defining the roles of each partner.
The partnership deed or partnership agreement usually contains information about all the characteristics that influence the association between partners. For example, it includes the purpose of the business, the capital contributions from each partner, the way gains and losses will be divided by the partners, and the privileges and entitlements of the partners to interest on loans and capital.
Partnership Deed is the Basic Requirement For a Partnership Firm Registration in Pakistan
When registering a partnership firm, it is necessary to execute a Partnership Deed or Agreement, which contains the terms and conditions of the partnership, including, among other things, the scope of the partnership, the object of the partnership, the shares of each partner, the mode and time of sharing profits. Partners expressly reduce their rights and obligations against each other into writing, just as they do in every other deed/agreement.
Partnership firms are required to file an application with their respective Registrar of Firms for the registration of partnership firms.
Procedure of Partnership Firm Registration
As it is already mentioned that the partnerships are governed and provided for under the Partnership Act, of 1932. Partners usually own partnership firms and businesses. It is required that a partnership firm or Business be run, managed and operated by a minimum of two partners. People who wish to establish an entity for a specific purpose, object or period are usually recommended to form a partnership firm or business.
A Partnership Firm can be Dissolved After its Purposes or Objectives are Achieved
A partnership firm can be dissolved after its purposes or objectives are achieved or after the period of time for establishing the corporation has expired.
Requirements For Partnership Firm Registration
A Partnership Firm can be registered under Partnership Act, 1932. Following are the crucial requirements for the partnership firm registration in Pakistan as under:
1. Consultation on a new partnership business name and place of partnership business.
2. Drafting of a Partnership Deed on a Non-Judicial Paper.
3. Signing the Partnership Deed.
4. Attaching the certified copies of all the partners.
5. A statement in the prescribed Form-1 has to be submitted to the Registrar:
i. The name of the partnership firm.
ii. The principal place or place of business of the firm.
iii. Any other places where the company carries its business.
iv. The date of joining the partnership firm for each partner.
v. All partner’s full names and their permanent addresses (as per CNIC).
vi. Partnership Firm’s duration, as mutually agreed by the partners or AT WILL.
Additional Requirements After Partnership Firm Registration
- National Tax Number from Federal Board of Revenue.
- Bank Account in the name of Business.
- Accounting records of the partnership firm, an organized & maintained profit account and balance sheet.
- Payment in Advance Income Tax as chosen by the Income Tax Ordinance of 2001.
- Registration from any other authority if decided under any business law to be followed.
Process of Partnership Firm Registration After Submission of Application For its Registration
A Partnership Firm Registration application is processed by the Registrar of Firms within seven days of the application and its accompanying documents being filed.
When all documents are submitted, a partnership firm can be registered with the Registrar of Firms of the city after scrutiny of all documents, especially the partnership deed and the CNICs. The Partners must sign the Deed of Partnership. Furthermore, the person’s signing must verify the statement. After the verification of every document by the Registrar of Firms, the firm’s entry is made in the Register of Firms and a respective certificate of registration of the partnership business will be issued by the Registrar of Firms for the new partnership firm.
Is the Registration of a Partnership Firm Compulsory?
No. There is no mandatory requirement for the partnership firm’s registration in Pakistan. Nevertheless, registering does take towards tax and litigation-related consequences that are beneficial to the business.
Advantages & Disadvantages of Partnership Business
There are several advantages to forming a partnership. Some advantages are as under
1) Partners can pool their resources to start a business that would be difficult to finance on their own.
2) Partners can share the workload and responsibilities of running a business.
3) Partners can bring different skills and knowledge to the business, which can make it more successful.
However, there are also some disadvantages to partnerships:
1) Partners may have disagreements about how to run the business, which can lead to conflict.
2) If one partner decides to leave the partnership, the remaining partners may be left with unsustainable businesses.
3) All partners are liable for the debts and liabilities of the business.
Our Services For Partnership Firm Registration
Taxocrate (Pvt) Limited is a group of expert lawyers with over 37 year of professional experience in partnership firm registration tasks in Karachi. For the last 3 years, our corporate and taxation lawyers and consultants are providing their expert advice and professional services in Islamabad, Rawalpindi, Peshawar and Lahore as well.
We assist our valued clients in the process of Partnership Firm Registration with the Registrar of 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 the behest and sake of our client negotiate the terms and conditions of the partnership with the other partners.
PARTNERSHIP REGISTRATION in Karachi & Islamabad, Pakistan.: Partnership registration process requires a partnership deed to form a partnership firm according to the Partnership Act 1932. There are several types of partnerships in Pakistan. We draft a partnership deed for your partnership firm and then submit it to the Registrar of firms, for registration of your partnership firm in Islamabad or Karachi, Pakistan.
Contact Us Now
You can contact us on any of the following platforms to get an instant support.