How do you register a partnership firm?
- Draft a partnership deed covering capital, profit sharing, roles and exit.
- Sign it by all partners.
- Apply to the Registrar of Firms with the deed and partners' details.
- Register the firm as an AOP with FBR: NTN registration in Pakistan.
Tax treatment of a partnership
An AOP files its own return and must file regardless of income. See income tax filing in Pakistan.
Is a partnership or an LLP better?
A partnership is simple but carries unlimited liability. An LLP limits liability.
What should a partnership deed cover?
- Names, addresses and capital of each partner.
- Profit and loss sharing ratios.
- Roles, decision rights and signing authority.
- Admission, retirement and death of a partner.
- How the firm is dissolved and assets divided.
Why joint liability deserves a second look
In an ordinary partnership each partner can be pursued for the firm's debts, including debts created by another partner acting for the firm. If that risk worries you, consider an LLP or a private limited company.