Choosing a Business Structure

choose the business structure which best suits your business

Synergy Business Consulting (SBC) offers a comprehensive range of Corporate / Company Matters Services to assist organizations in managing their legal and regulatory requirements effectively. Our services cover the entire lifecycle of a company, from incorporation to winding up, ensuring compliance with local laws and facilitating smooth business operations. Here are the detailed services we provide:

There are several types of business entities operating in Pakistan. Understand the criteria, liability and documents required for each, to decide which type of entity is best suited for your needs. If you are setting up business in Pakistan, you will need to establish a presence as either a Sole Proprietorship, a Partnership or a Company. The table below summarizes the key aspects of each type of business:

Types of Businesses

Business Type	Sole-Proprietorship	Partnership	Company
Definition	A business owned by one person	A business firm/ organization of two or more business partners	A business form which is a legal entity separate and distinct from its shareholders and directors
Owned by	One person	Generally between 2 to 20 partners. A partnership of more than 20 partners must incorporate	Private Company Private Company has at least 2 shareholders and a maximum of 50 shareholders. Public Company Public Company has at least 7 shareholders/members.
Legal Status	Not a separate legal entity Owner has unlimited liability Can sue or be sued in individual’s own name Can also be sued in business names Owner personally liable for debts and losses of business	Not a separate legal entity Partners have unlimited liability Can sue or be sued in firm’s name Cannot own property in firm’s name Partner’s personally liable for partnership’s debts and losses incurred by other partners	A separate legal entity from its members and directors. Members have limited liability Can sue or be sued in company’s name Can own property in company’s name Members not personally liable for debts and losses of company
Registration requirement	Age 18 years or above. Pakistani Citizens and Permanent Residents only Undischarged bankrupt cannot manage business without court or Official Receivers’ Approval	Age 18 years or above. Pakistani Citizens and Permanent Residents only Undischarged bankrupt cannot manage business without court or Official Receivers’ Approval	Age 18 years or above Minimum of 2 directors (if 2, At least one of the directors shall be Ordinarily Resident in Pakistan) Undischarged bankrupt cannot manage business without court or Official Receivers’ Approval At least two shareholders
Formalities and expenses	Quick and easy to set up Easy to administer and manage Registration cost is minimal Less administrative duties to adhere to	Quick and easy to set up Easy to administer and manage Registration cost is minimal Less administrative duties to adhere to	More costly to set up and maintain More formalities to comply with Annual Returns must be filed as Statutory Requirement of General Meetings, directors, share allotments, etc
Set-up fee	Nominal	Moderate	Varies
Continuity of the business entity	Exists as long as the owner is alive and desires to continue the business	Exists subject to Partnership Agreement	A company has perpetual succession until wound up or struck off
Closing of the business	By owner – Cessation of business	By partners – Cessation of business or dissolution of partnership	Winding up – Voluntarily by members, compulsorily by the High Court Striking Off