Here’s the definition of Association of Persons (AOP) as per Pakistani laws:
Legal Definition of Association of Persons (AOP)
Association of Persons (AOP) is defined under Section 2(95) of the Income Tax Ordinance, 2001, as:
“A group of individuals, whether incorporated or not, who collectively engage in a business or profession, and are jointly responsible for its management and control.”
Key Characteristics of Association of Persons (AOP)
1. Collective entity, not a company.
2. Group of individuals, organizations, or entities.
3. Engaged in a business or profession.
4. Jointly responsible for management and control.
5. No separate legal entity.
Purpose of Association of Persons (AOP)
AOPs are formed for various purposes, including:
1. Business collaborations.
2. Professional associations.
3. Charitable activities.
4. Social welfare initiatives.
Registration Requirements of Association of Persons (AOP)
To register an AOP in Pakistan:
1. Obtain National Tax Number (NTN) and Sales Tax Registration Number (STRN).
2. Register with Federal Board of Revenue (FBR) within 30 days of formation.
3. Comply with tax laws and regulations.
Tax Implications
AOPs are taxed as follows:
1. Tax rates: 12.5% or 17.5% (depending on income).
2. Tax deductions: Eligible expenses can be deducted from taxable income.
3. Tax audits: Conducted by FBR.
Consult a lawyer or tax professional to ensure compliance with regulations.
