The legal form you choose decides who is liable for the business’s debts, whether you can sell shares to investors, and how much paperwork you file each year. By the end of this guide you will know how the four common structures in Pakistan differ, which one suits your stage, and the first steps to register it.
This is general information, not legal or tax advice.
The four structures at a glance
| Structure | Where you register | Separate legal person? | Can it issue shares to investors? |
|---|---|---|---|
| Sole proprietorship | No separate registry; you register for tax with FBR | No | No |
| Partnership firm | Registrar of Firms in your province, or ICT Administration in Islamabad | No | No |
| Limited liability partnership (LLP) | SECP | Yes | No |
| Private limited company, including a single member company | SECP | Yes | Yes |
Sole proprietorship: fastest start, full personal risk
A sole proprietorship is you trading under a business name. There is no separate legal entity, so the business’s debts are your debts.
To formalise it, you register for income tax with FBR as an individual. FBR uses your 13-digit CNIC as your NTN. For online registration through IRIS, FBR’s page asks for a mobile SIM registered in your name, a personal email address, a bank account maintenance certificate and, if you have business premises, proof of tenancy or ownership plus a paid utility bill from the last three months.
It fits freelancers, consultants and founders testing an idea with their own money and limited risk. The main limit: you cannot sell shares, so an investor has nothing to buy. Some corporate clients may also prefer to contract with a company.
Partnership firm: two or more founders, shared liability
A partnership firm is governed by the Partnership Act, 1932. Partners sign a partnership deed that sets out capital, profit share, duties and exit terms. In a general partnership, each partner can be personally liable for the firm’s debts, including debts another partner took on.
Registration happens at provincial level, and each office sets its own forms and fees:
- Punjab: the District Officer (IPWM) acts as Registrar of Firms. The Multan district page says applications go through the Punjab business registration portal.
- Sindh: the Sindh business portal lists partnership firm registration, with an application on Form “A”, CNIC copies of all partners and two witnesses, the deed and a paid challan.
- Islamabad: the ICT Administration’s Industries Department registers firms. Its page lists Form-I, a deed on stamp paper, notarised documents and an appointment with all partners before the Registrar of Firms.
After registration, the firm registers with FBR as an association of persons (AOP). FBR’s page lists the deed, the Registrar of Firms certificate, all partners’ CNICs and an authorisation letter signed by every partner, and says AOPs register in person at a Tax House facilitation counter.
A firm fits a small service business run by people who trust each other and do not plan to raise equity.
Limited liability partnership (LLP)
SECP registers LLPs under the Limited Liability Partnership Act, 2017. SECP describes the LLP as combining the flexibility of a partnership with the advantages of a limited liability company. Its FAQ says an LLP needs two or more partners, has separate legal status, and requires partner CNICs or passports and an LLP agreement.
An LLP suits professional firms and agencies that want limited liability without shareholding. Like a partnership, it does not issue shares, so it is a poor fit if you plan to raise venture capital.
Private limited company: the default for investable startups
A company limited by shares is a separate legal person. SECP’s FAQ says members’ liability is limited to any amount unpaid on their shares. Investors buy shares, so this is the structure most investors expect.
You have two options:
- Single member company (SMC): one person forms the company and names a nominee, who must be a relative: spouse, father, mother, brother, sister, son or daughter.
- Private company: two or more members, with a cap of 50 members.
SECP’s FAQ also says there is no minimum authorised capital requirement.
How to incorporate on eZfile
SECP’s eZfile portal, part of its LEAP digital programme, replaced the older eServices system. SECP reported that 99.9% of incorporations in FY 2025 were processed online. The basic flow:
- Create an eZfile user account. Each director or subscriber receives a 4-digit PIN to sign filings.
- Reserve a name. It must not be identical or similar to an existing company or LLP, or use restricted words. As of 2026, SECP’s FAQ lists a name reservation fee of Rs 200 online (Rs 500 offline) and says a company name stays reserved for 60 days. Check the current fee on SECP’s site before you pay.
- Complete the incorporation form. Online, the system generates the memorandum and articles of association. You attach CNIC or passport copies of the promoters.
- Pay the incorporation fee, which SECP ties to the Seventh Schedule of the Companies Act, 2017.
- Receive the digitally signed certificate of incorporation by email and in eZfile.
SECP then forwards your incorporation data to FBR, which issues the company’s NTN if the information is complete and accurate.
What comes after incorporation
A company has more ongoing obligations than a proprietorship. Early ones listed by SECP include:
- Provide a registered office address within 30 days of incorporation.
- File Form-3 within 45 days of allotting shares.
- Identify and declare ultimate beneficial owners: anyone who controls 25% or more of shares or voting rights, or has effective control by other means.
- Issue shares in dematerialised (book-entry) form. SECP says this has applied to all newly incorporated companies since 3 March 2025.
You will also file annual returns and income tax returns every year. Budget for an accountant or company secretarial help from the start.
How to choose: five questions
- Will you raise equity in the next two years? If yes, incorporate a private limited company or SMC.
- Could the business create debts or claims larger than your savings? If yes, choose a structure with limited liability.
- How many founders are there? One founder can start as a sole proprietor or SMC. Two or more should put their agreement in writing, whatever the structure.
- Do your clients need a company? Ask your top three prospects before you decide.
- Can you keep up with compliance? A company brings more filings. A simple structure run properly beats a company run badly.
You can change later. SECP’s LLP regulations, for example, cover converting firms and private companies into LLPs. But a change takes time and fees, so choose with your two-year plan in mind.
Checklist: your next steps
- Write down your two-year plan: funding, number of founders and expected clients.
- Pick a structure using the five questions above.
- For a company or LLP, create an eZfile account and check name availability.
- For a firm, draft the partnership deed and read your provincial Registrar of Firms page.
- For a sole proprietorship, complete FBR e-enrolment on IRIS.
- Open a bank account in the business’s name once it is registered.
- Put a founders’ agreement in writing: roles, ownership or profit share, vesting and exit terms.
- Add your first SECP and FBR filing dates to a shared calendar.
Sources and further reading
- SECP: FAQs on incorporation
- SECP: FAQs on Companies Regulations, 2024 and eZfile
- SECP: Incorporation of a company
- SECP press release: eZfile, a new corporate registry (February 2024)
- SECP press release: corporate registry milestones in FY 2025
- SECP press release: Limited Liability Partnership Regulations, 2018
- FBR: Register for income tax (registration procedure)
- ICT Administration: Firm registration
- District Officer (IPWM) / Registrar of Firms, Multan
- Sindh Business One Window: Industries and Commerce Department services
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