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Types of Businesses in Pakistan

There are four types of businesses in Pakistan each with its own legal structure and rules. These are as, under Sole Proprietorships, Un-Registered Partnerships, Limited Liability Partnerships (LLP) registered from SECP, and Limited Company or Limited Liability Companies (PVT Ltd in Pakistan). Each of these has a unique business structure and rules, so it is important to know each one thoroughly before making any final decision about the type of business structure you will choose for your company.

To start a business in Pakistan one may opt for any one or more than one business structures

  • Limited Liability Company
  • Private Limited Company
  • Single Member Company
  • Public Limited Company
  • Guarantee Limited Company
  • Not For Profit/Association/Foundation
  • Limited Liability Partnership (LLP)
  • Partnership Firm
  • Sole Proprietorship

Comparison of different kinds of businesses in Pakistan:

The table below will show you a comparison of different kinds of businesses in Pakistan. This may help you in selecting a suitable form of business. The information provided below is for information only. However, it is always advisable to get proper legal advise to take a decision.

Sole Proprietor Partnership Not For Profit Company Limited Liability Company (Private Limited and Public Limited)
Formation Registration with Tax Authorities Required Registration with Registrar of Firms Required Licensing and Registration with SECP are Required Registration with SECP is Required
Periodic Compliance / Filing No filing except for Annual Tax Return Annual Tax Return of All Partners and Firm is required Periodic SECP filings required Periodic SECP filings required
Limited personal liability No No Yes Yes
Transferability of interest No Allowed, But Partners have to visit in Person. Yes, Often Limited Allowed
Duration Until the withdrawal or death of an owner At Will Unlimited Unlimited
Pass-through taxation Yes Yes Tax Exemption may be obtained Yes Corporate Tax Apply
Ability to raise capital Not as separate entity Yes, from partners only Yes, through donations and grants Yes
Limitations on number of owners Yes. Only One Owner. Maximum 20 partner No For Pvt. Limited: 50For Public Limited: No
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