How do you register a sole proprietorship?
Get your NTN on IRIS (NTN registration in Pakistan), add your business activity, and open a bank account in your name or trade name. Register for sales tax only if your activity requires it: sales tax registration in Pakistan (STRN) or provincial sales tax on services (PRA, SRB, KPRA, BRA).
How does a sole proprietor file taxes?
Business income goes on your personal return: income tax filing in Pakistan.
When should you switch to an SMC?
When liability, larger contracts or credibility matter. See SMC (single member company) registration in Pakistan.
Sole proprietorship: advantages and drawbacks
| Advantages | Drawbacks |
|---|---|
| Free NTN, quick start | Unlimited personal liability |
| One return, no SECP filings | Harder to win larger contracts |
| Full control | No shares to give investors |
Records a sole proprietor should keep
Keep sales and purchase invoices, bank statements, rent and utility bills for the business, and a simple ledger. These support your return and answer any FBR query. See FBR notice reply and tax audit support for what a query looks like.