In Pakistan, the most common business structures are:
- Sole Proprietorship: This is the simplest and most common type of business structure in Pakistan. It is owned and operated by a single person, and there is no legal distinction between the owner and the business. The owner is personally liable for all debts and obligations of the business.
- Partnership: This type of business is owned by two or more individuals, known as partners. The partners share the profits and losses of the business and are jointly and individually liable for the debts and obligations of the business.
- Limited Liability Company (LLC): This type of business is a separate legal entity, separate from its owners. It offers the benefits of a corporation, but with the flexibility and simplicity of a partnership. The owners, or shareholders, are only liable for the debts and obligations of the company to the extent of their capital contributions.
- Public Limited Company (PLC): A Public Limited Company is a type of business structure that is publicly traded, meaning that anyone can purchase shares of the company. They are also legally separated from the shareholders, which means shareholders have limited liability.
- Private Limited Company (Pvt Ltd): A Private Limited Company is a type of business structure that is owned by a small group of shareholders, and shares are not publicly traded. It is considered as separate legal entity and shareholders have limited liability.
- Branch Office: A foreign company can open a branch office in Pakistan and conduct business here. The branch office is an extension of the parent company and is not a separate legal entity.
Each structure has its own advantages and disadvantages, so it’s important to choose the one that best suits your business needs. It’s always advisable to take advice from a legal professional or a tax advisor before making a decision.