SME in Pakistan
SME in Pakistan (In the industrial development of a country the importance of the SME sector cannot be overemphasized. SMEs constitute nearly 90% of all the enterprises in Pakistan; employ 80% of the non-agricultural labor force; and their share in the annual GDP is 40%, approximately. However, unlike large enterprises in the formal sector, a small and medium enterprise is constrained by financial and other resources. This inherent characteristic of an SME makes it imperative that there should be a mechanism through which it may get support in different functions of business including technical upgradation, marketing, financial and human resource training & development).
There are different types of firms, amongst these three types of businesses that SMEs usually adopt are; sole proprietor, partnership and private limited company.
A sole proprietorship also known as a sole trader/sole owner is a type of business entity which is owned and run by one individual and where there is no legal distinction between the owner and the business
A partnership is a type of business entity in which partners (owners) share with each other the profits or losses of the business. Partnerships are often favored over corporations for taxation purposes
Private Limited Company
Private limited company is a voluntary association of not less than two and not more than fifty members, whose liability is limited, the transfer of whose shares is limited to its members and who is not allowed