A partnership is defined as, 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, according to the Partnership Act of 1932. A partnership will usually compromise of a minimum of two and a maximum of twenty members who are jointly responsible for all mattes concerning the business activities.
While partnerships are a common mode for operations for many small and medium sized business enterprises there is no compulsory requirement for registration of a partnership in Pakistan. Nonetheless registering a partnership does lead to tax and litigation related consequences that are advantageous to the business.
Requirements to Register a Partnership
- Each partner’s– Full Name, Father or Husband’s Name, Residential Address and Occupation.
- Copy of the National Identity Cards of each partner.
- Partnership deed on stamp paper. A Partnership Deed is the document containing an agreement that details the rights and obligations of each partner participating in the venture.
- Proof of the address of partnership business, usually utility bills
- If the address of the partnership business is rented then the rent deed is required
- Copy of the original receipt of Partnership fee. This fee needs to be deposited at the National Bank of Pakistan.
- Signature of all the partners in partnership\firm business in presence of a registrar or an authorized officer.
- 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 as required by the Income Tax Ordinance of 2001.
- Registration from any other authority if required under any law of business to be undertaken.
Once all documents are ready, a partnership may be registered with the Registrar of Firms of an area where the office of the firm is situated or proposed to be situated. A statement in prescribed form must be delivered to the relevant registrar stating:
- The firm’s name
- The place or principal place of business of the firm
- Names of any other places where the firm carries its business
- The date when each partner joined the firm
- Full names of all partner and their permanent addresses (information should tally with the NIC)
- Duration of the firm
The statement must be signed by all the partners of the firm for the time being or any authorized agent on their behalf. Furthermore, the statement must be verified by the persons signing it. Post verification of all documents by the registrar, the entry of the firm is made in the Register of Firms and a respective statement is filed for the creation of the new partnership.