How to Register a Partnership

Table of Content:

1. Easy to get started
2. Partnership-advantages
3. Sharing the burden
4. Access to knowledge, skills, experience, and, contacts
5. Better decision making
6. Privacy
7. Ownership and Control combined
8. More partners, more capital
9. Easy to access profits
10. Wide range of opportunities.

How to Register a Partnership:

You can opt to register a Partnership Firm or Business in Pakistan. The partnership is provisioned and regulated under the Partnership Act, of 1932. Owners of the Partnership Firm or Business are usually referred to as Partners. A minimum of 2 Partners are required to operate, manage and run the affairs of the Partnership Firm or Business. A partnership firm or Business is usually recommended for persons who for a specific purpose, object and period are desirous to establish an entity. Consequent to the purpose or object having been achieved or the period for which the entity is required to be established is meted out, can eventually dissolve the same.

 Process of Partnership Firm Registration to execute a Partnership Agreement, wherein the terms and conditions of Partnership including amongst others; terms, scope, object; shares of respective partners; mode and time for sharing of profit, etc. is expressly chalked out.

Process of Partnership Firm Registration requires an application to be submitted to the respective District Registrar Firms in whose jurisdiction the Partnership Firm is being established. The process of Partnership Firm Registration requires for submission of the following documents:

1. Partnership deed executed on non-judicial stamp worth PKR 1,000 (name of Partnership Firm and Address must be mentioned along with all rights and obligations of the parties against each other and any third parties) attested by 2 witnesses as prescribed under law.
2. Filled Form 1.
3. Bank Challan of prescribed Registration Fee.
4. CNIC copies of all partners along with CNIC of all witnesses.
5. Copy of all the above documents duly notarized by the public.
6. Partners may have to physically appear before the Registrar Firms if required by him.

Registrar, a partnership Firm or business processes the application within 7 days after the application along with the foregoing documents for Partnership Firm Registration is filled with Registrar Firms.

Partnership-Advantages:

Less formal with fewer formalities partnership:

allows you to go into a business model with someone else without the perceived formality of a limited company. The accounting process is very simple since they do not have to comply with International Financial Reporting Standards or the Companies Act 2017. Unlike limited companies they do not require to comply with the submission of annual returns maintain a register of members and debentures, conduct meetings, and ensure quorums are as per requirement.

Easy to get started:

The partner can agree to create the partnership verbally or in writing a partnership agreement is also not a mandatory requirement but it’s sensible to have a partnership agreement in place. Rights and responsibilities of partners, their investment and profit and loss share, and what would happen in various possible situations.

Sharing the burden:

Difficult for a sole proprietorship in the case of startups particularly in professional firms like accounting, law, and private medical practices. With the experience and expertise of shared people, partnerships can undergo the start phase comfortably.

Access to knowledge, skills, experience, and, contacts:

Each partner will bring their knowledge, skills, experience, and, contacts to the business, potentially giving a better chance of success than any of the partners trading individually.

Partners can share out tasks, with each specializing in an area that they are best and enjoy most. If one partner has expertise in finance and another in marketing, they can utilize their skills in this specialized field. In contrast, a sole trader has to do it all by himself.

Better decision-making:

Compared with sole proprietorship, in a partnership the business benefit from a unique perspective brought by each partner. In business, very often 2 heads are better than one with the combined conclusion of debating a situation far better than what each partner could have achieved individually.

Privacy:

In limited companies, some documents are available for inspection such as minutes of the annual general meeting, register of members, etc. where the partnership can keep documents confidential.

Ownership and Control combined:

In a limited company, ownership and day-to-day management of the business are split between shareholders and directors. That is directors’ decision-making can be constrained by shareholder wishes such as special resolution to divest, and initiate changes in memorandum and articles.

More partners, more capital:

More partners mean that there are more money and borrowing capacity is greater resulting in reaping the benefits of economies of scale.

Easy to access profits:

In a business partnership, the profits of the business are shared between the partners. They flow directly through to partners’ bank accounts whereas incorporates they are paid through dividends and salaries.

Wide range of opportunities:

When you are operating a business solo, your time is pretty limited.  You are restricted with the number of projects and clients you can take on simply because there is only one of you and a lot to do.

The team becomes more productive when you have more owners on board which means ultimately having increased freedom to pursue more opportunities and bring more partnerships can bring on additional opportunities that you might never have at sole proprietorships. Increased access to knowledge and contacts.

To know more details about how to register a partnership firm or business, contact us at +92-343-1058325 or visit us at https://bizcognitis.com/.