A Guide to Business Registration in Pakistan: Sole Proprietorship, Partnership & Private Limited Company
Navigating the business registration process in Pakistan involves different authorities depending on the business structure. This guide breaks down the process for the three most common structures: Sole Proprietorship, Partnership and Private Limited Company. Each structure has different legal implications, registration authorities, and post-registration compliance requirements.
1. Sole Proprietorship
A Sole Proprietorship is the simplest business structure, owned and managed by a single individual. The owner has unlimited liability. There is no separate registration with the SECP for a sole proprietorship — primary legal recognition comes from obtaining a National Tax Number (NTN) and Sales Tax Registration (if applicable) from the Federal Board of Revenue (FBR).
Primary Registration Authority
Federal Board of Revenue (FBR)
There is no separate registration with the SECP for a sole proprietorship. The primary legal recognition comes from obtaining a National Tax Number (NTN) and Sales Tax Registration (if applicable) from the FBR.
Sole Proprietorship Registration Procedure
- Obtain a National Identity Card (CNIC): The proprietor must have a valid Computerized National Identity Card (CNIC).
- Register with FBR for NTN:
- Visit the FBR e-Portal: Go to https://e.fbr.gov.pk/.
- Create an Individual Account: If you do not already have an account, register using your CNIC and a valid mobile phone number.
- File Registration Application: In the portal, navigate to "Registration" section and select "Enrollment as Individual."
- Complete the Form (IRIS): Provide personal details, declare business activity and anticipated income, and details of business premises (if any).
- Submission and Verification: Submit the form — the system will generate your National Tax Number (NTN).
- Complete the Form (IRIS): Fill out the detailed form (IRIS). You will need to: Provide personal details and contact information. Declare your business activity and anticipated income. Provide details of business premises (if any).
- Register for Sales Tax (If Required):
- Threshold: Mandatory if annual taxable supplies exceed Rs. 10 million. Voluntary registration is also possible.
- Process: Use the FBR e-Portal, provide NTN and business details; upon approval you will receive a Sales Tax Registration Number (STRN).
2. Partnership
A Partnership is a relationship between two or more persons (up to 20) who agree to share the profits of a business carried on by all or any of them. Primary Registration Authority: Registrar of Firms (Under SECP) While a Partnership Deed on a stamped paper is legally sufficient, registration with the Registrar of Firms provides conclusive legal proof of the firm's existence and its partners.
Primary Registration Authority
Registrar of Firms (SECP)
Partnership Registration Procedure
- Draft a Partnership Deed:
This is the most crucial document. Draft on non-judicial stamp paper of appropriate value (varies by province). It should include:
- Name and address of the Partnership Firm
- Names, addresses, and CNIC numbers of all partners
- Nature of the business
- Capital contribution by each partner
- Profit-sharing ratio
- Rules for management, admission/retirement of partners, and dissolution
- Apply for Name Availability (Optional but Recommended):
Check desired firm name on the SECP e-Services portal (eservices.secp.gov.pk) to avoid rejection.
- Register with the Registrar of Firms (SECP):
Online (recommended):
- Create an SECP e-Services account
- Select "Registration of a Firm"
- Fill Form A online and upload:
- Scanned Partnership Deed
- Scanned CNICs of partners
- Proof of business address (utility bill)
- Pay the prescribed government fee online
Manual: Physical submission at SECP e-Services Facilitation Center is also possible.
- Receive Certificate of Registration:
After verification, the Registrar issues a Certificate of Registration.
- Register with FBR:
Use the FBR e-Portal to register the Partnership Firm for NTN and STRN (if applicable). Select "Partnership" as business type and provide firm registration details.
3. Private Limited Company
A Private Limited Company is a separate legal entity distinct from its shareholders. Liability is limited to the amount unpaid on shares. This structure is recommended for serious business ventures due to limited liability and easier access to finance.
Primary Registration Authority
Securities and Exchange Commission of Pakistan (SECP)
Private Limited Company Registration Procedure
- Reserve a Company Name:
Create an SECP e-Services account and use "Company Name Reservation" — you may suggest up to three names. The name must end with "(Private) Limited".
- Prepare Incorporation Documents:
Key documents include:
- Articles of Association (AOA): Internal rules governing management.
- Memorandum of Association (MOA): Defines company activities and relationship with the outside world.
- Form A: Declaration of compliance.
- Form 21: Registered office address notice.
- Form 28: Particulars of Directors, CEO, and Secretary.
- Requirements for Subscribers & Directors:
- Minimum Members: At least two subscribers (shareholders).
- Minimum Directors: At least one director (can be a subscriber). At least one director must be a resident of Pakistan.
- CNICs of all subscribers and directors.
- Registered Office: A physical address in Pakistan for the registered office.
- File for Incorporation Online:
- Log in to SECP e-Services
- Select "Incorporate a Company" and follow the guided process
- Upload scanned documents (CNICs, MOA, AOA, Forms)
- Pay incorporation and filing fees online (bank challan or other available methods)
- Receive Certificate of Incorporation:
After verification, SECP issues the Certificate of Incorporation — the company's legal birth certificate.
- Post-Incorporation Compliance (Mandatory):
- Register with FBR: Use the Certificate of Incorporation to obtain NTN and STRN; the company must file annual income tax returns.
- Open a Corporate Bank Account: Provide Certificate of Incorporation and SECP documents to the bank.
- Register with Social Security & EOBI: If you hire employees, register with provincial social security institution (e.g., SESSI in Sindh) and EOBI.
Summary Table: Key Authorities & Outputs
| Business Structure | Primary Registration Authority | Key Registration Output(s) |
|---|---|---|
| Sole Proprietorship | Federal Board of Revenue (FBR) | 1. National Tax Number (NTN) 2. Sales Tax Registration Number (STRN) |
| Partnership | Registrar of Firms / SECP | 1. Certificate of Registration (Registrar of Firms) 2. NTN / STRN from FBR |
| Private Limited Company | Securities & Exchange Commission of Pakistan (SECP) | 1. Certificate of Incorporation (SECP) 2. NTN / STRN from FBR (post-incorporation) |
Conclusion
Choosing the correct business structure is essential. A sole proprietorship is easiest to start but carries unlimited personal liability. A partnership offers shared management but requires a clear partnership deed and registration for stronger legal proof. A Private Limited Company provides limited liability and greater credibility, making it the preferred structure for businesses planning scale, investment, or formal operations. Follow the outlined steps carefully, keep all documents accurate and updated, and complete post-registration compliance (tax, bank, social security) to operate legally and smoothly in Pakistan.