1. Forms of Business Organizations Forms of Business Organizations Overview in Pakistan’s Perspective Abid Husein Khan, Corporate Lawyer & Advisor LLM (Sweden), Fellow United Nations 2001-03(Geneva)

2. Options for selecting Business Entity Any entrepreneur in Pakistan has a range of options in its decision- making process to choose a form of business structure: Any entrepreneur in Pakistan has a range of options in its decision- making process to choose a form of business structure: 1. Corporations 2. Limited Liability Companies /Joint Stock Companies 3. Partnership 4. Joint Venture 5. Sole Proprietorship

3. Corporations ► In Pakistan, corporations are created by the Federal Government or a Provincial Government by the Acts of Parliament or, as the case may be, by an Act of a Provincial Assembly. ► Each individual enactment governs the purpose, functions, management, legal status and matters connected to the individual corporation, including winding-up.

4. Joint Stock Companies ► A 'company' is a legal entity admitted by law to do business, own properties, sue and be sued for the recovery of properties, money, enter into contracts etc. in its own name and independent to its member (s). ► To be a ‘company’ in law it must be registered under the Companies Ordinance, 1984. ► Any one or more persons can form a company by fulfilling the formalities required by law.

5. Partnership ► A 'firm' is a relationship between two or more persons who have agreed to share profits of a business according to their participation. ► The partners are collectively called a ‘firm’ and the name under which they do business is called the ‘firm name’. ► Any two or more persons (up to 20) can form a partnership to do any one or more businesses through an agreement in writing. ► It is not compulsory in law to register a partnership. However, a registered partnership has more advantages than an un-registered partnership.

6. Sole Proprietorship ► A 'sole proprietorship' is a form of doing business where one person owns and runs a business under a specific business name. ► Any person interested in doing a business may start the same at any time by giving a particular name to its business. ► To start a business as a ‘sole proprietorship’ no prior registration of it is required with any government department or authority.

7. Legal Entity under I.T. Law ► Under the Income Tax Ordinance 2001, is federally levied on the total income of a person excluding the deduction allowed by the Ordinance for one tax year. The term person is also divided into four categories which include: ► a) an individual ► b) company ► c) small company ► d) association of persons