- Legal Requirements
Legal Requirements for Starting a Sole Proprietorship in Pakistan
Starting a sole proprietorship in Pakistan is straightforward and requires minimal legal formalities. Below are the key steps and requirements to legally establish a sole proprietorship business:
Select a Business Name
- No formal approval is required for the business name.
- Entrepreneurs have the flexibility to select any appropriate name that aligns with their business identity.
Register with the Federal Board of Revenue (FBR) – Obtain NTN
- A National Tax Number (NTN) must be obtained from FBR.
- NTN is issued to an individual, not the business, meaning a single proprietor can run multiple businesses under one NTN.
Sales Tax Registration (If Applicable)
- If the business involves the sale of taxable goods or services, it must register for Sales Tax (STRN – Sales Tax Registration Number).
- Registration is mandatory if revenue exceeds the specified threshold set by FBR.
Food Business
- Requires a license from Food Authorities
– Punjab
– Sindh
– KP
Obtain Additional Licenses (If Required)
Depending on the nature of the business, additional licenses or registrations may be required from the relevant regulatory bodies.
Import & Export Business
- Requires registration with the Trade Development Authority of Pakistan (TDAP) and WEBOC (Pakistan Customs).
Pharmaceutical Business
- Requires a Drug License from DRAP (Drug Regulatory Authority of Pakistan).
Private Security Business
- Requires licensing from the Ministry of Interior.
- Business Name Selection – No formal approval is required, but the name should not infringe existing trademarks.
- Partnership Deed – A written agreement outlining profit-sharing, management responsibilities, and exit clauses.
- Registration (Optional but Recommended) – Registering with the Registrar of Firms ensures legal enforceability.
- National Tax Number (NTN) from FBR – Required for taxation and legal compliance.
- Sales Tax Registration (If applicable) – Necessary if revenue exceeds FBR’s specified threshold.
- Additional Licenses or registration (If Required) – Certain businesses (e.g., food, import/export, pharmaceuticals) require regulatory approvals.
- SECP Registration – LLPs must be registered under the Limited Liability Partnership Act, 2017. The following requirements are to be followed for registration
- Selection of appropriate name of LLP
- Application to SECP for reservation of name and obtaining approval
- Submission of required documents and information like registered address of company, LLP Agreement between the partners, Computerized national identity card, consent of designated partner etc.
- National Tax Number (NTN) from FBR – Required for taxation and business operation
- Sales Tax Registration (If applicable) – Necessary if the business crosses the tax threshold.
- Industry-Specific Licenses – Regulatory approvals may be required for specialized businesses.
- SECP Registration: All limited liability company need to be registered with SECP. The following requirements are to be followed:
- Selection of appropriate name of the company
- Application to SECP for reservation of name and obtaining approval
- Submission of required documents and information like registered address of company, Memorandum of Association, Articles of Association, Computerized national identity card, Consent of shareholders etc.
- National Tax Number (NTN) from FBR – Required for taxation and business operation
- Sales Tax Registration (If applicable) – Necessary if the business crosses the tax threshold.
- Industry-Specific Licenses – Regulatory approvals may be required for specialized businesses
