Week or chapter 7

Regulatory Requirements to Establish Enterprises in Pakistan

Types of enterprises (eg sole proprietorship ; partnership; private limited companies etc)

Starting a business in Pakistan requires following legal procedures and regulations. The
process depends on the type of business entity you choose. Below are the common types of
enterprises and their regulatory requirements:

1. Sole Proprietorship

A Sole Proprietorship is the simplest form of business, owned and operated by a single person.

Regulatory Requirements:

Register the business name with the Federal Board of Revenue (FBR) for tax purposes.

Get a National Tax Number (NTN) from the FBR.

If dealing with sales, register with the Sales Tax Department.

Open a business bank account using the NTN.

2. Partnership

A Partnership is when two or more people join to run a business and share profits. It is
governed by the Partnership Act 1932.

Regulatory Requirements:

Create a Partnership Deed (a written agreement) between partners.

Register the partnership with the Registrar of Firms in the relevant province.

Obtain an NTN for tax purposes.

If required, register for Sales Tax.

3. Private Limited Company

A Private Limited Company is a separate legal entity, meaning the owners (shareholders) are
not personally liable for debts. It is governed by the Companies Act 2017.

Regulatory Requirements:

Register the company with the Securities and Exchange Commission of Pakistan (SECP).
Choose a unique company name and get it approved by SECP.

Submit Memorandum of Association (MOA) and Articles of Association (AOA) to SECP.

Obtain an Incorporation Certificate from SECP.

Get an NTN from FBR and register for Sales Tax (if applicable).

Open a business bank account.

4. Public Limited Company

A Public Limited Company can sell shares to the public and is listed on the stock exchange.

Regulatory Requirements:

Register with SECP and get approval for the company name.

Submit the MOA and AOA to SECP.

Obtain an Incorporation Certificate.

Register with FBR for NTN and Sales Tax (if applicable).

If listed on the stock exchange, comply with Pakistan Stock Exchange (PSX) regulations.

5. Limited Liability Partnership (LLP)

An LLP is a mix of a partnership and a company, providing limited liability to partners.

Regulatory Requirements:

Register with SECP under the Limited Liability Partnership Act 2017.

Obtain an NTN from FBR.

Maintain financial records and submit annual reports to SECP.

Conclusion

To start a business in Pakistan, you must follow different legal requirements based on the type
ofIntellectual Property Rights and Protection

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part 2

Intellectual property: rights and protection

Introduction:
Intellectual Property (IP) refers to creations of the mind, such as inventions, designs, brand
names, artistic works, and symbols. Intellectual Property Rights (IPR) protect these creations,
ensuring that creators or owners get recognition and financial benefits from their work.

Types of Intellectual Property Rights (IPR):

1. Copyrights:

Protects books, music, movies, art, software, and other creative works.

In Pakistan, copyrights are protected under the Copyright Ordinance 1962.

The creator gets the right to control reproduction, distribution, and performance of their work.

2. Trademarks:

Protects logos, brand names, slogans, and symbols that represent a business.

Registered under the Trademarks Ordinance 2001 with the Intellectual Property Organization of
Pakistan (IPO-Pakistan).

Prevents others from using a similar name or logo to confuse customers.

3. Patents:

Protects new inventions and technological innovations.

Registered under the Patent Ordinance 2000 with IPO-Pakistan.

The inventor gets exclusive rights to make, use, or sell the invention for up to 20 years.

4. Industrial Designs:

Protects the visual appearance of a product, like the shape of a car or a unique bottle design.

Registered under the Registered Designs Ordinance 2000.

Ensures no one can copy the design without permission.

5. Geographical Indications (GIs):

Protects products that come from a specific region, like Basmati rice from Pakistan.

Registered under the Geographical Indications (Registration and Protection) Act 2020.

Ensures that only genuine products from that region can use the name.
How to Protect Intellectual Property in Pakistan?

Registration with IPO-Pakistan: Apply for copyrights, trademarks, patents, or designs with
IPO-Pakistan to get legal protection.

Legal Action Against Infringement: If someone copies your work without permission, you can
take them to court.

International Protection: Businesses can apply for global IP protection under WIPO (World
Intellectual Property Organization).

Conclusion:

Intellectual Property Rights are essential for protecting creative works, business identities, and
inventions. Registering IP with IPO-Pakistan ensures legal protection, encourages innovation,
and helps businesses grow without fear of imitation.

enterprise. A Sole Proprietorship has the simplest registration, while a Private or Public Limited
Company has more steps, including SECP registration. Ensuring compliance with tax laws and
regulatory authorities is essential for smooth business operations.

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Part 3

Regulatory Requirements to Register an Enterprise in Pakistan (With Special Emphasis

on Export Firms)

Introduction

Starting a business in Pakistan requires following legal steps based on the type of enterprise. If
the business is involved in exports, additional registrations and approvals are needed. The
government has specific rules to ensure that export firms follow quality standards and trade
regulations.

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General Steps to Register an Enterprise in Pakistan

1. Choose the Type of Business

There are different types of businesses in Pakistan:

Sole Proprietorship – Owned by one person.

Partnership – Owned by two or more people.

Private Limited Company – A separate legal entity registered with the Securities and Exchange
Commission of Pakistan (SECP).

Public Limited Company – A large company that can sell shares to the public.

Limited Liability Partnership (LLP) – A mix of a partnership and a company.

2. Register with the Relevant Authorities

Sole Proprietorship:

Register the business name with the Federal Board of Revenue (FBR).

Obtain a National Tax Number (NTN).

Partnership:

Draft a Partnership Deed and register it with the Registrar of Firms.

Get an NTN from FBR.

Company (Private/Public Limited & LLP):

Register with SECP.

Submit Memorandum of Association (MOA) and Articles of Association (AOA).

Obtain a Certificate of Incorporation.

Get an NTN from FBR.

3. Register for Sales Tax (If Required)

If the business sells goods or services, it must register for Sales Tax (STRN) with FBR.

4. Open a Business Bank Account

A business bank account is required for official transactions.

The bank requires an NTN certificate and business registration documents.

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Special Requirements for Export Firms

If a business plans to export goods or services, it must follow extra steps:

1. Register with the Trade Development Authority of Pakistan (TDAP)

TDAP promotes and regulates exports from Pakistan.

Export firms must register with TDAP to get export licenses and benefits.

2. Obtain an Export Registration Certificate (ERC)

Exporters must apply for an Export Registration Certificate (ERC) from the State Bank of
Pakistan (SBP).

This certificate allows the business to receive export payments from foreign buyers.

3. Get a Membership from a Trade Body

Export firms should join relevant trade associations like:

Pakistan Textile Exporters Association (PTEA) (for textile businesses).

Pakistan Rice Exporters Association (for rice businesses).

Pakistan Chamber of Commerce and Industry.

4. Comply with Export Laws and Quality Standards

Follow the Import and Export Control Act for trade regulations.

Ensure products meet Pakistan Standard and Quality Control Authority (PSQCA) requirements.

Follow Customs Laws for shipping goods internationally.

5. Obtain an E-Form for Export Payments

E-Form is issued by banks and required for international trade transactions.

It is needed for customs clearance of exported goods.

6. Get Necessary Export Certifications (If Required)

Some products need special certification, like:

Halal Certification (for food items).

ISO Certification (for quality assurance).

Health & Safety Certificates (for medical and pharmaceutical products).

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Conclusion

Registering a business in Pakistan involves choosing the right business type and registering
with FBR, SECP, and other authorities. Export firms need extra approvals from TDAP, SBP, and
trade bodies to ensure smooth international trade. Following these regulations helps businesses
grow and compete in global markets.

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Part 4
Taxation and Financial Reporting Obligations in Pakistan

Introduction

All businesses in Pakistan must follow taxation and financial reporting rules set by the
government. These rules ensure that businesses pay their fair share of taxes and keep proper
financial records. Proper taxation and reporting help businesses avoid legal problems and build
trust with customers and investors.

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1. Taxation Obligations

a) National Tax Number (NTN) Registration

Every business must register with the Federal Board of Revenue (FBR) to get an NTN.

This is needed to file tax returns and open a business bank account.

b) Income Tax

All businesses must pay income tax on their earnings.

Tax rates depend on the type of business:

Sole Proprietorship & Partnership: Taxed as per individual income tax rates.

Private & Public Limited Companies: Corporate tax rate applies (usually around 29%).

c) Sales Tax (If Applicable)

Businesses selling goods or services must register for Sales Tax (STRN) with FBR.

The standard sales tax rate is 18% (varies for some industries).

Businesses must collect sales tax from customers and submit it to the government.
d) Withholding Tax

Some businesses must deduct tax from payments made to employees, contractors, and
suppliers.

This tax is submitted to FBR on behalf of the recipient.

e) Export & Import Taxes

Exporters may enjoy tax exemptions or lower tax rates.

Importers must pay custom duties and import taxes.

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2. Financial Reporting Obligations

a) Maintaining Financial Records

Businesses must keep records of all income, expenses, and transactions.

These records help in tax filing and financial reporting.

b) Filing Annual Tax Returns

Every registered business must file an annual tax return with FBR.

This includes income statements, tax payments, and deductions.

c) Audited Financial Statements (For Companies)

Private & Public Limited Companies must prepare audited financial statements.

These include:

Balance Sheet (shows assets and liabilities).

Income Statement (shows profit or loss).

Cash Flow Statement (shows money coming in and going out).

Audits must be conducted by certified accountants.

d) SECP Reporting (For Companies)

Companies registered with SECP must submit annual financial statements.

Public companies must also publish financial reports for investors.

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Conclusion

Businesses in Pakistan must register with FBR, pay taxes, and submit financial reports to stay
compliant with the law. Proper financial reporting helps businesses grow and avoid penalties.
Following tax and reporting rules also improves business credibility and financial stability.