Partnership Registration / AOP / Firm Formation in Pakistan

Introduction

A person wishing to carry out business may not have access to a large amount of capital initially needed to start the work. It is usual and more beneficial, then, to onboard another person or persons. Not only the person tackles the capital availability issue, but persons can conduct business more efficiently with the combined expertise of those persons.

The relationship between persons to carry out business activities in a partnership. In Pakistan, this may be between a minimum of two and a maximum of twenty persons. The persons in the partnership provide the money or capital for the business; this does not have to be equal.  These persons are responsible for the business’s debts, and they share any profits or losses based on the terms of their agreement.

We can call the individual partners the ‘association of persons’ or a ‘firm’. It is not compulsory to register a partnership by law, but it is better to do so. The partners must formulate a written agreement specifying the terms and conditions and profit or loss sharing ratios. The Partnership Act, 1932, in Pakistan governs all the partnership rules.

Requirements to Register a Partnership

Individuals must submit the following details containing documents to the Registrar of an area in which the business or its office is operating:

1. The name of the firm – Individuals must not use some restricted words in the name;
2. The principal place of business of the firm;
3. Individuals must also include the name of the office where the company is performing;
4. The full names of all of the partners and their permanent addresses;
5. Individuals must also have the dates of joining of each partner; and
6. The duration of the firm.

All the partners will sign this statement before submission. Once you have satisfied the registrar, the individuals have fulfilled that all registration requirements. Now, he will update the firm name in the ‘Register of Firms’ and file the statement.

The Partnership Agreement

This is a partnership deed, and individuals must incorporate the following details in this:

Suppose the partners desire that the partnership will not dissolve or terminate on the death or retirement of any partner. In that case, you can tell that in the deed.

How KLA Pakistan Can Help

Based on our research and expertise, we have often found out that people are generally reluctant to involve themselves in communication or correspondence with civil servants or deal with government institutions. In this case, KLA comes in. We have multiple years of experience in the particularities and registration of a business and partnership.

Therefore, we register your business as a partnership with the Registrar. Also, we assist you in formulating the terms of your partnership agreement and advise you on all legal matters relating to the same.