Registering a Partnership

“Any seven or more person(s) associated for any literary, scientific or charitable purpose”

In Pakistan, a partnership is a company that has been formed by a formal agreement between two or more persons or companies to do business together. The capital of the partnership is contributed by the partners and the partners are liable for all the debts of the partnership and share in the profits and losses of the group of companies by the terms of the partnership agreement.

Partnership Act, 1932

This Act, commonly known as the Partnership Act, 1932, was passed to establish and amend the law relating to partnerships. It covers the whole of Pakistan. The Act defines the characteristics of a partnership and prescribes how a partnership may be registered and dissolved. It also describes the relationship between partners and with third parties, the risks to the partnership and the partners, and the status of minors as partners.
In Pakistan, partnerships (except for banking partnerships) are generally limited to 20 partners. The share of a partner cannot be changed without the prior consent of the other partners. However, a partner's right to a share of the partnership income may be acquired by another person in trust.


Partnerships in Pakistan are characterized by their taxation, and are classified as:

  1. Registered companies
  2. Unregistered companies

The income of a registered company is subject to super tax before being passed on to the partners. The personal income of shareholders is also subject to income tax at the standard rate.
In the case of unregistered corporations, income tax is levied on the income of the corporation and the shareholders do not pay any portion of the distribution received by the unregistered corporation.


AskWakeel offers the following partnership services in Pakistan:

  1. Partnership Name Information
  2. Research of partnership name
  3. Preparation of partnership agreement
  4. Registration of partnership
  5. Preparation of partnership dissolution deed
  6. Registering the Dissolution of a Partnership

Partnerships can be a great way to grow, especially if you have like-minded partners with the same goal. In Pakistan, partnerships are registered through a partnership deed under the Partnership Act 1932. According to the Act, there is a private law that states that a competing business should not be allowed to breathe and that both partners should work together for the mutual growth of the partnership. No one should hide anything from the other and the relationship should be based on mutual trust, care, and cooperation. Records will be kept and any dissolution of the partnership will be done through proper accounting and auditing. Partnership funds also include the goodwill of any business controlled by the partners. In all cases, it is best to contact the experts at AskWakeel to be fully informed on all areas of partnership law.

How is the existence of a partnership determined?

In determining whether a partnership exists or whether a person is a member of a partnership, one must consider the actual relationship between the partnerships as shown by all the material facts.
The fact that the profits or gross income of a property may be shared by persons who have a common or joint interest in that property does not make them partners.
The sharing of profits of a partnership, or the acquisition of profits that are dependent on the creation of profits or that vary with the profits of the partnership, does not in itself make an individual a partner of a person interested in the business, and in particular.

  1. A person carrying on or engaged in business on behalf of the lender
  2. In consideration of an employee or agent
  3. A pension for the widow or children of a retired member; or
  4. As consideration for the transfer of the business by the former owner or co-owner of the business, or any gift that does not in itself make the recipient a partner in the person carrying on the business.