What Is A Trade Organization?
Trade Organizations are entities that represent various business sectors and industries. They are formed to promote the interests and welfare of their members, enhance the competitiveness of their respective sectors, and contribute to the overall national economic growth.
These organizations may include chambers of commerce, industry associations, and other similar groups that bring together businesses, entrepreneurs, and professionals within a particular industry or geographic area. They work to create a favorable business environment, advocate for policy changes that benefit their members, provide networking opportunities, and offer various support services to help their members succeed.
Legislative Framework In Pakistan
In Pakistan, the registration and regulation of trade organizations are primarily governed by the Trade Organizations Act, 2013 (the “Act”) and Trade Organizations Rules, 2013 (“the Rules”). This framework enables the registration and governance of trade organizations, ensuring that all genders and business sectors are adequately represented across all levels. It plays a crucial role in developing policies that enhance the business environment and drive economic growth in Pakistan.
Under this framework of law, any group of individuals or entities that share a common business interest may form a trade organization. The organization must be registered with the Registrar of Trade Organizations in the relevant province or territory, and it must comply with various legal requirements and regulations.
To register a trade organization, the applicants must submit an application to the Registrar, along with the required documents and fees. The application should include the organization's constitution, by-laws, and rules and regulations, as well as a list of members and office bearers.
Procedure Of Obtaining The License Of Trade Organization
Eligibility For License
In the light of Section 3 of the Act and Schedule A, the federal government shall only grant the license if the Applicant is a Trade Organization or intends to be formed as any of the types of trade organizations specified in sub-section (2) of Section 3 of said Act.
The Applicant shall only be licensed under the Rules for registration unless it is self-sustained and financially feasible (Rule 3(3)) i.e. where the expected expenses do not exceed the proposed revenues and if meet the following requirements:
(a) Specific area or trade or industry or service or any combination.
(b) Chamber - a minimum of one hundred and fifty (150) members who are either permanently domiciled in the relevant district or have a substantial business interest such as an industrial concern, a corporate business entity or are being assessed for the purposes of income tax and sales tax in the territorial jurisdiction of the proposed chamber.
(c) Chamber of small traders - a minimum of three hundred (300) members who shall be permanently domiciled in the relevant district or have a substantial business interest such as industrial concern, a business entity or are being assessed for the purposes of income tax and sales tax in the territorial jurisdiction of the proposed chamber.
(d) Association - it has one hundred (100) members or in case less than one hundred members but the combined revenue of the sector is significant and the proposal is supported by at least half of the total number. The members shall be stakeholders or membership is on an all-Pakistan basis unless it has been established to the satisfaction of the Federal Government that the nature of the trade, industry, service or any combination thereof renders it impractical or impossible to have membership on all-Pakistan basis.
(e) Association of small traders - a minimum of three hundred (300) members who shall fulfill all the requirements mandatory for the establishment of an association on all Pakistan basis. Provided that license for registration as an all-Pakistan association shall not be granted to more than two trade organizations in the same sector, out of which at least one will represent the small traders, small businesses or small industry in the same sector.
(f) Women’s chamber - a minimum of one hundred (100) members.
(g) Town association - a minimum of one hundred (100) members.
Application For License
The detailed requirements for an application for a grant of license to a trade organization are covered in Rule 4 of the Rules and Schedule-A, the following are the pre-requisite.
(a) a list of prospective members along with details of prospective members’ business character, national tax number, and sales tax registration, if applicable, in the name of the business concern; and a copy of the national identity card of the authorized representative of the member.
(b) names and profiles of sponsors of trade organizations.
(c) justification for the establishment of the proposed trade organization which may include-
- Chamber and a chamber of small traders: the economic profile of the district indicating the number and nature of industrial concerns, average revenue receipts during the last three years, and profile of traditional products, if any; or.
- Women chamber: economic profile of the division or district, indicating the number and nature of industrial concerns, average revenue receipts during the last three years, and profile of traditional products, if any; or.
- Association and an association of small traders: sectoral brief containing size and nature of trade, industry or service, number of trading and industrial concerns, its contribution to gross domestic products, the estimated volume of imports and exports, and revenue collection in the sector; or.
- Town association: economic profile of the concerned town, tehsil, taluka, or district indicating the number and nature of industrial concerns, average revenue receipts during the last three years and profile of traditional products, if any.
(d) a hard and a soft copy of the draft memorandum and articles of association of trade organization in accordance with these rules, the Act, the Ordinance and the Federal Government’s public notices as issued from time to time.
(e) copies of bye-laws of the trade organization, if any.
(f) National tax number for the applicant trade organization.
(g) copies of national press notice as provided under rule 9.
(h) receipt evidencing payment of fees as set out in Schedule ‘E’.
(i) plan of activities for the trade organization as audited by a firm of chartered accountants.
(j) financial-feasibility-statement, certified by a chartered accountant.
Terms And Conditions Once The License Is Obtained Under Rule 6
Once the license is obtained, the Applicant/Trade Organization shall maintain a membership register with access to the public and maintain operations and management’s paper records. As for the first five years of the grant of a license, the Trade Organization shall maintain the minimum membership threshold as provided in eligibility clauses in Rule 3.
It is noteworthy that, within the period of thirty days of the date of the license, the Trade Organization may apply for incorporation as a company and shall secure the incorporation within ninety days of the date of the license.
Also within one month, the Trade Organization shall submit an application form for membership of the Federation of Pakistan Chambers of Commerce and Industry.
Where To Make Application
The application for registration of a Trade Organization shall be made to the Directorate General of Trade Organizations, Pakistan who shall process the applications for grant of licenses and registration of trade bodies under the Act. With Musheer.com, you can swiftly have your trade organization registered using our company registration services.
