Business entities in Pakistan can be established in several types, each with unique characteristics and legal requirements. The size, scope, and purpose of your firm will all play a role in determining the best business structure for you in Pakistan. Sole proprietorships, Limited Liability Companies (LLC), partnerships, and Public Limited Companies are Pakistan’s most common business entities (PLC) forms. Before making a choice, it is critical to comprehend the legal requirements of each type of entity because each has advantages and disadvantages of its own. The most common types of legal companies in Pakistan are: 

Sole Proprietorship 

A business owned and run by just one person is known as a sole proprietorship. It is the most straightforward and typical type of business entity in Pakistan. It is simple to set up and doesn’t require specific legal procedures. The sole proprietorship’s owner is personally responsible for the company’s debts and liabilities. 

Partnership 

A business registered by two or more people who split earnings and losses is called a partnership. In Pakistan, general and limited partnerships are the two main types. All participants in a general partnership are accountable on an individual basis for the debts and obligations of the company. Solely the general partners are personally liable in a limited partnership, and the limited partners are only liable to the extent of their capital contributions. 

Private Limited Company 

An individual or group of shareholders owns and runs a private limited corporation. It requires additional legal procedures because it is a more complicated business entity than a sole proprietorship or partnership. However, the debts and responsibilities of a private limited company are not personally owed by the shareholders of that company. 

Public Limited Company 

A public limited corporation is owned and run by one or more shareholders whose shares are exchanged on a stock market. Its establishment entails a lot of legal requirements and is the most complicated and regulated commercial entity in Pakistan. Public limited companies, like private limited companies, exempt their shareholders from personal liability for the debts and obligations of the company. 

Cooperative Society 

A cooperative society is a business entity owned and controlled by its members, who are also the customers or users of its services. Cooperative societies are typically formed to provide mutual economic benefits to their members and are governed by the Cooperative Societies Act of 1925. 

One-Person Company (OPC) 

A one-person company (OPC) is a business entity owned and operated by a single individual. It is a relatively new business entity in Pakistan, introduced by the Companies Act 2017. An OPC combines the simplicity and flexibility of a sole proprietorship with the limited liability protection of a private limited company. 

The best business entity for your company will ultimately depend on your unique requirements and circumstances. Before selecting a choice, it is crucial to thoroughly weigh the advantages and disadvantages of each kind of corporate company registration. Sidekick is a leading provider of company secretarial services in Pakistan, with experienced professionals who are familiar with the legal requirements and can assist companies with the various tasks and responsibilities associated with the company. In addition to seeking business consultancy from a legal professional or accountant, consider reaching out to Sidekick for expert guidance on choosing the right business entity for your company.