Partnerships business laws in Pakistan, Joint ventures laws in Pakistan, Partnership business

Formation of Partnerships in Pakistan

Relevant Partnership Laws of Pakistan

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.

Formation of Statutory Corporations in Pakistan

Statutory corporations or bodies are creation of a statute. They are formed by the Central Government or a Provincial Government through a Central Statute or a Provincial statute, as the case may be. The purpose, functions, powers, duties, liabilities, rights, management and legal status of any such statutory corporation is governed by each individual enactment under which such statutory corporation has come into existence. Administration of such statutory corporations is vested in a governing body, chairman etc. as envisaged under the enabling statute. Circumstances or pre-conditions of winding-up of any statutory corporation are also provided under the relevant statute.

Statutory Corporations do not require any registration.

Relevant Joint Venture Related Laws of Pakistan

Law Regarding Joint Ventures in Pakistan:
Joint ventures are an appropriate vehicle of carrying out a business in Pakistan in cases where two or more parties do not intend to form a separate entity to deal with a venture, however, they merely agree to act together in a specific manner and under certain terms and conditions. In such a case each party retains its own individual identity which may be in the form of a company or a partnership. In a joint venture, therefore, these parties agree to enter into a consortium or a joint venture agreement. Relationship between the parties is created on the terms and conditions as stated in this agreement and no relationship that is beyond the ambit of this agreement comes into existence. Rights, liabilities etc. of each contracting party are also determined according to the terms and conditions of the agreement.

There is no requirement under the law of Pakistan for registration of such Agreements. However, the entities which form Joint Venture may themselves be required to be registered under the relevant law.

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Formation of Business in Pakistan
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Registration a Business in Pakistan
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