Understanding the Different Types of Business Models in Pakistan

Different Types of business in Pakistan

Having investment, so want to start your own business in Pakistan. Thought of doing business is great, to take part in county’s economy and for the betterment of your economic state for future. But, need to resolve where to start and be fully aware of the types of business in Pakistan.

Understanding the Different Types of Business Models in Pakistan
Understanding the Different Types of Business Models in Pakistan

By keeping all this in mind, we will familiarize you with Pakistan’s business types at this spot. It will help you select the right options for business because a wrong decision will lead to losses in business.

Let’s move on to explore some types of business in Pakistan. The main categories of business that seem to practice in Pakistan are

Types of Business in Pakistan

  • Sole Proprietorship
  • Un-registered Partnership
  • Registered Partnership
  • Limited Liability Partnership (LLP)
  • Company (There are varieties of companies that exist)

Now, we will summarize all these types of businesses in Pakistan.

Sole Proprietorship

In Sole Proprietorship, you will be the sole owner of your own business. It is the most convenient and formal business type in which you must take over all business responsibilities, loss and profit. In this case, you will be your own boss, and this business needs a small amount to begin. It is very easy to handle business on a small scale. Just need to register yourself as DBA (Doing Business As)

Examples are as


Unregistered Partnership Business

In a partnership-based business, in which you have one or more partners to share your business, you and your partner(s) have the authority to handle the business. It’s up to you whether you can register your Partnership or not. The agreement of the Partnership may be oral or written.

Unregistered Partnerships can be handled easily. Loans, Profit sharing and loss, are according to partnership terms and conditions.

Registration expenses of the Partnership are not necessary to register yourself at the tax department Lack of legal protection or benefits are unavailable to the registered business by the government. Due to unregistered partnerships, it is easier for people to trust your business.

Registered Partnership

This type of Partnership is registered and owned by two or more individuals. Each partner is responsible for all the loans, obligations, profit and losses. The partnership agreement is a legal paper that outlines each partner’s rights and responsibilities and the Partnership’s terms and conditions concerning operations, entitlement to profit, and liability for loss. It is very easy to establish and handle.

Registered Partnership
Registered Partnership

This business has legal rights and trade mark and is also well-recognized due to registration.

Profits shared among partnerships regarding the agreement profits and losses are among the partners according to the agreement. All partners have commanded all over the business. Partners and firms are jointly and severally liable to the third party. In case of loss, creditors claim their money from the firm (including one or all partners who are in business). Investors found it more comfortable to invest in formal organizations. A partnership can plead or be pleaded in its name.


  • Red Bull and GoPro.
  • Spotify and Uber.
  • Levi’s & Pinterest.
  • Maruti Suzuki are examples.

Limited Liability Partnership (LLP)

A concept in Pakistan that joints the characteristics of a partnership and a company. In this, the Partnership is a type with the limited liability of the partners and a separate legal entity.

Compared to a Partnership, each partner in an LLP has limited liability for the debts and obligations of the business. The partners’ assets are not at risk in case of any legal dispute or financial crisis.

Characteristics of a limited liability partnership are as follows

  • Limited liability available to partners except for unfair acts or omission, or fraud
  • Profits are divided among the partners as the committed agreement.
  • Partners have a complete hold over the business.
  • The flexible structure of management.
  • Higher compliance requirements may increase the burden on the company.

LLPs may need help to raise large amounts of capital, as investors may prefer to invest in a more proper form of business. The limited scope of operations, such as banking and insurance, is not allowed. Doctor offices, Law firms, accounting offices, and architects are examples because multiple partners are involved.


Limited Liability Company

It is a separate company owned by shareowners and managed by a board of directors.

The responsibility of the shareholders is confined to the amount of their investment in the company. The company’s profits are distributed among the shareholders as dividends.

Characteristics of a limited liability company are as follows.

  • Separate legal entity.
  • Limited liability for shareholders.
  • Ability to raise large amounts of capital.
  • Clear and well-defined management structure.
  • Transferability of ownership.
  • Higher compliance requirements, such as filing annual returns, holding regular board meetings and annual general meetings, and maintaining proper accounts, may increase the business’s administrative burden.
  • Higher start-up costs.
  • Limited control of a Shareowner in a company
  • Accountants or solicitors.
  • Cafes, bars and restaurants.
  • Handypersons, builders and contractors are examples.

The above described information is about all the types of business in Pakistan; these Business Ideas will be very cooperative for anyone willing to do business in a country like Pakistan. Good luck to all of them for a bright future.