Legal structures for forming Startups in Pakistan.
The term “Startup” is in usage for describing a new business venture wherein, entrepreneurs and/or companies harmoniously combine their skills, ideas and financial resources to generate new business activity with higher returns. In fact, it could be apt to place the “Start up” phenomenon at the epicenter of a vibrant entrepreneurial cultural.
In Pakistan the ‘Startup’ trend is gaining momentum as entrepreneurs with creative ideas are seeking funding solutions to generate economic activity and new revenue streams. Devising a legal structure for a ‘Startup’ is essential, if it is to be made viable and functional. The objective of such a legal structure is twofold. First and foremost is to clearly layout the rights and obligations of the parties working under ‘Startup’ umbrella. Secondly, the aim is to safeguard their business interests. Thus ensuring a stable business platform wherein disputes can be prevented, the liabilities are defined and the risks can be mitigated.
The legal structure of a Startup venture mainly depends on the long term vision of the parties entering into such venture and the kind of venture in itself which is being entered into. A Startup in Pakistan may be structured in the following ways:
