Partnership remains a common mode of business enterprise in Pakistan
for small to medium business set-ups. Partnerships are normally formed
where there is a desire to have some structural flexibility alongwith
some formality of relationship between partners. There is no compulsory
requirement for registration of a partnership in Pakistan . Nonetheless
some litigation and tax related consequences and advantages are linked
to a registered partnership.
Legal regime for establishment and regulation of partnerships in
Pakistan is stated in the Partnership Act, 1932 which defines a
partnership in the following terms:
"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."
Any
twenty or less persons desiring to carry out a lawful commercial
activity or a profession may form a partnership except in certain cases
e.g. where twenty or more persons may form partnership to undertake
practice as lawyers or accountants or any other practice which cannot
be carried out as a limited liability company under the provisions of
law. In all other cases where the number of intended partners increases
beyond the figure of twenty a company should be incorporated.
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:
- Firm name
- Place or principal place of business of the firm
- Names of any other places where the firm carries on business
- Date when each partner joined the firm
- Names in full and permanent addresses of the partners
- Duration of the firm
The aforestated 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.
Once Registrar is satisfied that the abovementioned requirements have
been complied with he records entry of the statement in Register of
Firms and files the statement.