INSTITUTE OF BUSINESS & MANAGEMWNT (IB&M)

UNIVERSITY OF ENGINEERING AND TECHNOLOGY (UET)

LAHORE.

PROJECT TITLE: Multiple Task Project.

COURSE: Law & Society
COURSE INSTRUCTOR: Ms. Zunaira
SUBMISSION DATE:7 May, 2024

SUBMITTED BY:

Abdullah ilyas 82
Aqsa Javed 74
Maria Awais 52
Sunaiha 76
Zeeshan 06

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 Task 01: Market visit
Small Businesses (Contracts)
 Business: Magu & Sons (Motorcycles spare parts)
Location: 9-SM Rafi market Mcleod Road, Lahore.
CONTRACTS INFO:
This business is owned by a sole proprietor, and his two sons help with it. They have a wholesale
shop. He pays the rent of the shop monthly as he has a contract with the shop owner for eight
years, and after one year, the rent is increases by 5%. When the contract is done, the shop owner
will give the advance back to Magu & sons within three months as per the contract. If the shop
owner cannot pay an advance back to Magu & sons, they will not free the shop. Magu & Sons
has two types of suppliers: Importers, from whom they purchase products from china, and
manufacturers, who sell their products to Magu & Sons. The only contract with importer is to
import goods on time, as they are not responsible for any type of damage. For manufacturers
Magu & Sons have a contract; when their goods have any type of damage or are not working,
they will return the goods. Magu & Sons has a B2B business as they supply goods to retailors.
They supply goods in other cities, and they have a contract with a bus driver who is responsible
for sending goods to other cities. Any damage caused by the process of sending goods to their
destination will be paid for by bus driver. If there is damage from Magu & Sons, they will be
responsible and provide a new product to retailors, but the time limit for returns is three days.
Retailors can change product within three days; otherwise, Magu & Sons will not be responsible.

 Business: Rite Center

Location: Shop#15, SM Rafi Market 61 Mcleod Road, Lahore.
CONTRACTS INFO:
Rite Center is also a business for motorcycle spare parts owned by two brothers. They have two
employees who work at different times, like one in the morning and the other at 4:00 pm. They
have their own shop and one rented inventory house with a five-year contract. Both brothers pay
rent from time to time. They have only one supplier whom they are sponsoring, as they only
have yellow themed goods. There is contract whenever supplier launch new product they supply
those to rite center and suppliers will be responsible of any damage during shipping. There is
also a contract for purchase returns to suppliers in any case. Rite Center has both B2B and B2C
businesses. They have contracts with customers for sales returns within 1 to 2 days, and with
retailers, they have contracts for sales returns within 4 days. Rite Center also has a contract with
box packagers who work within the market to send their goods to bus drivers who will take off
for the destination of the retailer. If damage is caused by the box packager, he will be
responsible, and if the bus driver causes any damage, he will be responsible.

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 Business: Shama Lasaani Corporation
Location: 8.S.M Rafi Market, 61 Mcleod Road, Lahore.
CONTRACTS AND INFO:
This is also a business for motorcycle spare parts owned by a sole proprietor. He has one
employee who is with him from the opening to the closing of the business. His shop is rented as
he has a contract with the shop owner for 6 years. He has a B2C business. He has multiple
suppliers, and mostly he himself goes shopping for goods at the weekends. He has a contract
with suppliers for purchase returns. He also has a credit purchase contract, which he has to pay
within 15 to 20 days. Sometimes, when a customer has to go another city, he makes a contract
with the box packager to deliver the goods within the time period, and he will be responsible for
any damage if caused by the packaging. He has a contract with customers as well; if they want to
buy in credit, they have to pay within 5 days, and customers can also return purchases within 2
days.
 Business: Khan General Store
contract info:
Khan General shop is a small kriyana shop. They opened this business in 1997. They carry
everyday necessities such as rice, lentils, spices, cooking oil, toiletries, chips, cookies, and
cleaning products. I inquired as to whether they are registered, and if not, why not. They said no
because they don't want FBR to keep an eye on them, and they don't want to pay taxes since they
regard them as too costly, and they already make a modest profit on their items. They purchase
things straight from the producer. Every week, a salesperson comes to their business to take
merchandise orders.
To guarantee seamless operations they frequently have formal agreements with their suppliers.
These agreements include the name of the business, the owner's name and shop number, the
location where the shop is situated, pricing, payment conditions, and return policies. The deal is
for three months. In terms of pricing, the corporation sets a wholesale price for the stores and a
selling price for the shopkeepers who sell the goods. Generally, payments are made when the
manufacturer delivers the order, but some manufacturers prefer to sell on credit and select the
date of month in which the owner of the shop will pay the payment. The salesperson shows them
the slip generated by the company and they have to pay the amount written on the slip.
Contract with employees, as small business shop is run also by their 2 elder brothers. So there
are no written agreements between them by end of the month the total profit divided equally
between them. Mostly they sell product on cash but with regular customer they also deal on
credit bases and its all is verbal but shopkeeper write the amount on their register time or date is
not decided.

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 Business: Rashid General Store
contract info:
Rashid General Store is also a small business near my house. He launched this business in 2021
when the shop's owner lost his job at a firm. They specialize on snack goods such as chips, cold
drinks, ice cream, and biscuits. They are also unregistered, and they tell me the same thing: the
paperwork and registration process is arduous. They buy merchandise from wholesalers at
Lahore's township market. He tells me that the pricing is reasonable for a store owner like me,
and that it is simple for him to acquire products as needed. He writes down on his register every
day what things he will need and how much inventory he has left in the business.
He, like other shop salesmen, came to their business once or twice a week to purchase products
directly from the maker, but he bought the majority of his products from the township wholesale
market. He bought directly at a good price on cash from wholesalers, but the shops he frequents
acquire merchandise on credit. There is no formal agreement between them, and all contacts with
them are conducted verbally. However, he did purchase certain products from the firm. He
reaches a deal with them. In terms of pricing, the company establishes a wholesale price for the
stores and a selling price for the shopkeepers who sell the merchandise. Typically, payments are
paid when the manufacturer delivers the order, However, the manufacturer also sell on credit
basis and specify the month in which the business owner will make the payment. The salesperson
presents them the slip created by the firm, and they must pay the sum shown on the slip. He is
the sole owner of the business and he and his son works on the shop father in the morning and
son in the evenings. His father pays him handsome amount so he can bear his monthly expenses
comfortably. They mostly sell products in cash, but with frequent customers, they also deal on
credit. Everything is verbal, but the shopkeeper writes the amount on their register. The time or
date is not set.

 Business: Kashmir bakers

contract info:
Kashmir Bakers is a medium-sized shop that has been serving its local community for almost 40
years. They offer a variety of baked goods and also daily household item, including bread,
pastries, cakes, cookies, rice, lentils, spices, cooking oil, toiletries, chips, and cleaning products.
Currently, the business is not officially registered, but they are planning to register in the future
to expand their operations and gain more credibility. They source their products from a mix of
wholesale markets, distributors, and direct manufacturers to ensure a diverse range of high-
quality ingredients. While they might not have formal agreements with all their suppliers, they
likely operate based on purchase orders or verbal agreements. Payments to suppliers are typically
handled on a cash-on-delivery basis or through credit terms, depending on the relationship with
the supplier.

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In terms of contracts and procedures, it’s common for bakeries of this size to use formal written
contracts with major suppliers but not necessarily with customers. These contracts typically
include details about payment terms, delivery schedules, quality standards, and cancellation
policies. In the absence of formal contracts, clear agreements on price, delivery, and other
important details are ensured through verbal communication and mutual understanding. Trust
and good relationships with customers are built through consistent quality, excellent customer
service, and fair dealing. Hiring is likely done based on skill, experience, and fit with the bakery
they hire employees recommended by the people and also from the near villages they come from
the contract with them verbally about the salaries and timing. They have established policies for
returns or exchanges to ensure customer satisfaction. Customer can simply return the product by
showing the receipt.
They have faced misunderstandings or disputes with suppliers due to the lack of a formal
contract. They handle customer transactions through cash and jazz cash. They handle customer
complaints or returns promptly and professionally, with the aim of resolving the issue to the
customer’s satisfaction. Their main stakeholders likely include their suppliers, distributors,
employees, and customers. They manage their relationships with their stakeholders through
regular communication, fair dealing, and mutual respect. The main stakeholders are brother 6
brother manages this business and they have a formal written agreement on paper of profit
distribution. They distribute equall profit between them.
 Business: Noyan Crockery Store (Three-star melamine dealer)
Location: Shop#2, main bazar haqnawaz road kamal market, baghbanpura,LHR
Owners: Haji Asghar Khan, Waqar Khan
Contract & Procedure:
Suppliers and the business form verbal express contracts. To shield both sides from liability,
suppliers are given security checks. Delivery delays or late payments are resolved via candid
dialogue and compromise. In order to guarantee moral and legal agreements, salespeople,
managers, and—above all—buyers are involved in the contract negotiation process following
consultation with the business owner. Referrals from previous providers are used by new
suppliers to guarantee that future risks are negligible or nonexistent for all parties.
Trust and client satisfaction are Noyan Store's top priorities. Bills expressly say that customers
would get their money back if they return an unstitched item they bought, even if it's been a year,
because of lint or incorrect shrinking that caused uneven staining. The item is returned to
suppliers to resolve lint issues; if suppliers are unable to make accommodations, the business
will suffer a loss on that piece. Meeting the pricing expectations of clients presents the biggest
hurdle. Seasonal and off-season discounts are available despite fixed tariffs. There's a discount
season to season.

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 Business: Hameed City Center
Location: 62- chock Madina main bazar haqnawaz road, baghbanpura,LHR
Owners: Mian Asim Saeed
Contract & Procedure:
With branded businesses, Hameed City Center enters into signed express contracts. Since the
contract is legally binding on brands, they can sue them if they later refuse to comply. For local
markets, they favor direct verbal express contracts that are negotiated face-to-face regarding both
quality and pricing. With the need that damaged goods be returned, they pay in advance and
clear the cash upon delivery. By spending 70 to 80 lakhs on seasonal items, they allay worries
about trust. Suppliers often postpone supplies due to payment delays, however they do
occasionally make exceptions. In order to prevent liability, Faisal Garments clears payments in
weekly and occasionally monthly installments.
In order to promote repeat business, Hameed City Center places a high value on having a polite
manner when interacting with clients. Customers are offered a refund or an exchange for another
item when they complain about a piece being defective. Discounts are negotiable and clothing is
sent according to the seasons and consumer demand for certain items. The discount rate would
be higher during the on-season and lower during the off-season.

 Business: Ajwa crockery Center

Location: main shop main bazar haqnawaz road, baghbanpura, LHR
Owners: Hafiz Adnan
Contract & Procedure:
With its suppliers, Ajwa Store has established a verbal express contract. letting people choose
what they want to buy and bargain freely, as well as conducting the transactions in an open
manner. They decide in advance verbally. If an item is damaged, a refund will be issued. Due to
the sacrosanct trust that has developed over the course of their contract partners' more than 20
years in the market. Regarding contract management, Ajwa store has no difficulties because of
its credibility. They don't encounter any difficulties implementing the contract because of their
credibility.
Ajwa store cultivates positive relationships with its clients by listening to their issues. All issues
are successfully resolved. The store allows returns from customers if there is a problem with an
item. In addition to offering a variety of discounts, such Ramadan-Off and end-of-season deals,
they also allow rates to be negotiated in response to customer demand. Their suppliers are always
looking for what's fresh in the market, and the components are shipped according to current
trends. Ajwa Store top concern is making sure that its clients are happy.

 Business: MIRZA JEE GENERAL STORE

Info:They are a small general store located in Kashmir block market, Allama Iqbal town, the
owner mostly runs the shop while his 3 sons help him. Its open 7am to 1am at night all days of
the week.

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Contract and procedure:
For items that can be stored for longer, they have contract with a whole sale
shop for stocking of their products. They write the items that they need the stock of throughout
the week and put an order in at the end of the month. The supplier then delivers the products in a
large van. The agreed upon timing for the deliveries is 12 o’clock. They leave a message to the
owner before setting the order out for delivery. In case they can’t pay at the time of the delivery,
both agreed upon a set amount to be paid through weekly installments, this is all done verbally
and written record that both maintain, to avoid conflicts, when the record is updated they both
sign it and write the date at the end of the update. All this is done for the majority of items
present in the store like flour, spices, everyday essentials like shampoo soap, razor, kids
lunchables biscuits, lays etc. The minimum order that they need to put in is for 1 lakh. If any one
of the items runs out of stock before the month is over they need to go to the whole seller
themselves and purchase that item.
For items that expire quickly like bread eggs etc, they get delivered by individual companies and
small suppliers. They have different delivery times and if they can’t pay for the items they credit
it. They also receive shelf rent from different bread companies, the amount of shelf rent gets
discounted from the payment that the store has to pay. The shelf rent is paid by companies who
want to display their items front and center on the shelfs of the store so that their products are
more prominent on the shelfs.
There is also delivery service provided by mirza jee store, they only delivery to close by areas
and the order has to be above Rs. 500.
There were 3 company fridges and two company display of bread company in the shop. The
companies send their agents which go to these shops for selling their products through these
stores. The fridges are provided by the companies and their maintenance is also done by the
company for free. these companies do not pay shelf rent. The companies themselves are
responsible for stocking of products in the fridges. They have consignment inventory systems
meaning the only pay for the cost of items that they have sold on their shops, the company keeps
track of the stock of the products present in their fridges and then takes the payment from the
store. The companies maintain this info and issues a receipt at the end of the month. for the
display they are also maintained by the company employees and they also remove any expires
products and takes It back with them. they do not operate on consignment inventory.

 Business: Farooqi store

Info:
It is also a general store which Is owned by two brothers. The shop timing is from 8am to 10pm.
They have 2 permeant employees and 1 that comes for an hourly wage.

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Contract and procedure:
The permeant employees are mostly recommended by trusted people they
know and from an uneducated background. The employees are then required to give the copy of
their CNIC and a character certificate is made. This tells them about any past crimes they might
have done. The salary and the working hours are negotiated verbally. Most of them have come
from nearby villages looking for jobs in the city so they also provide them with accommodations
like shelter and food. The permeant employees get two days off the whole month and every six
months they are given more days off to travel to their village and visit their families. The number
of days are negotiated between the owner and the employee. They are given their salaries in the
first 10 days of the month. Their salary is increased 2-5% every year.
The other employee that comes on an hourly wage calls the owner and asks which hours he
needs him to come in. The owner then tells him the hours and he comes in to work. The money is
given at the end of the shift. This employee does not need to come to work every day. When
there is a lot of work to be done the owner calls the employee and the rate is discussed between
them and the employee comes in to work with the agreed upon conditions.
Their stocking procedure is similar to Mirza jee store.
If they accidently sell any expired food items they are returned by the customer and given a new
one, the expires item is then returned to the company at the end of the month if there is a large
amount they receive compensation from the company according to the company’s’ policy.
They also sell customers the products on credit. The amount is written on a notebook by the
owner and the customer signs it. The previous credit payments have to be paid at the end of the
month before they can be eligible to buy things on credit for the next month. They give this
service to only people that live nearby and have been their customer for a long time who they
trust. To protect themselves the have a credit limit of Rs 5000-7000.
They also have delivery service for nearby areas only.
 Business: Unnamed shop under mosque.
Info:
A small general store located in a residential area under Usman mosque, Nizam block Allama
Iqbal town Lahore. Managed by only one person. The timing of the shop is from 7am to 10pm.
Contract and procedure:
Because they are a very small shop their stock delivery is different from the
first two they get most of the stock by going to the whole seller themselves. They do receive
scheduled deliveries from bread companies in early morning. They have to be present for the
bread delivery because they have a set time and do not back that day. They then make a receipt
for every delivery for the month, a copy of the receipt Is kept by the shopkeeper and the
company, then the total has to be paid by the end of the month.

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They do not have any delivery service or credit purchase system for customers. They also have
no employees or help from other people.
They mostly had stock for kid’s school lunch as it was a residential area.
 Business: Al-Hafeez Stationers
Introduction:
Al-Hafeez Stationers is a small stationery shop located in Baghbanpura.The shop has been in
operation since 2017 and is owned by Mr. Ahmed, who has over 6 years of experience in the
stationery business. The shop sells a variety of stationery items, including paper, pens, pencils,
markers, and office supplies.
Contracts and Agreements:
1.Supplier Contracts:
Al-Hafeez Stationers has formal agreements with its suppliers, which helps to ensure a smooth
supply chain and quality products.
which include:
- Wholesale price lists
- Payment terms (cash on delivery or credit with a 30-day payment period)
- Delivery schedules (7 to 8 days)
- Quality standards
- Return policies (defective or damaged products can be returned within 7 days)
The agreements are typically for a period of three months and are renewable.
2.Employee Contracts:
The shop has two employees, who are both paid a monthly salary. There are no written contracts
between the employees and the shop owner, but the terms of employment are agreed upon
verbally.Employees are paid on a monthly basis, and their salaries are based on their experience
and qualifications.
3.Customer Contracts:
There are no written contracts between the shop and its customers. However, the shop has a clear
refund and exchange policy, which is communicated to customers verbally,which helps to build
trust with customers.Customers can return defective or damaged products within 7 days of
purchase, and the shop will provide a full refund or exchange the product.
4. Purchasing and Delivery:
Al-Hafeez Stationers purchases its products from a variety of local suppliers.The shop owner,
Mr. Ahmed, is responsible for purchasing and ordering products, and he uses a combination of
cash and credit to make payments to suppliers.The shop offers delivery services to its customers,

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and products are typically delivered within 6 to 7 days of purchase.The shop also offers a same-
day delivery service for an additional fee, which is convenient for customers who need products
urgently.
 Business: Galaxy stationery shop
Introduction:
Galaxy Stationers is a small stationery shop located in Saddar. The shop has been in operation
since 2018 and is owned by Mr. Abdullah, who has over 5 years of experience in the stationery
business. The shop sells a variety of stationery items.
Contracts and Agreements:
1. Supplier Contracts:
Abdullah Stationers has formal agreements with its suppliers. Here’s a sample contract between
Galaxy Stationers and its suppliers:
CONTRACT FOR SUPPLY OF STATIONERY ITEMS
This contract is made on [date] between:
GALAXY STATIONERS (hereinafter referred to as "the Buyer")
Address: Saddar
[Supplier Name] (hereinafter referred to as "the Supplier")
Address: [Supplier Address]
PRODUCTS AND PRICES
The Supplier shall supply the stationery items listed in the attached price list at the prices
specified therein.
PAYMENT TERMS
The Buyer shall pay the Supplier within 30 days of delivery of the products.
DELIVERY SCHEDULE
The Supplier shall deliver the products within 7-8 days of receipt of the purchase order.
QUALITY STANDARDS
The Supplier shall ensure that the products meet the quality standards specified by the Buyer.
RETURN POLICY
Defective or damaged products can be returned within 7 days of delivery, and the Supplier shall
replace them or provide a refund.

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TERM AND TERMINATION
This contract shall be valid for a period of three months and shall be renewable for a further
period of three months’ subject to mutual agreement. By signing below, the parties acknowledge
that they have read, understood, and agreed to the terms and conditions of this contract.
GALAXY STATIONERS
Signature: ______________________
Name: Mr. Abdullah
Title: Owner
SUPPLIER
Signature: ______________________
Name: _______________________
Title: _______________________
2.Employee Contracts:
The shop has three employees, who are paid a monthly salary. There is a written contract
between the employee and the shop owner, which includes terms of employment, salary, and
benefits.
3.Customer Contracts:
There are no written contracts between the shop and its customers. However, the shop has a clear
refund and exchange policy, which is communicated to customers verbally.
 Business: Al-Faisal Stationers
Introduction:
Al-Faisal Stationers is a small stationery shop located in Sahar road. The shop has been in
operation since 2015 and is owned by Mr. Al-Faisal, who has over 8 years of experience in the
stationery business.
Contracts and Agreements:
1. Supplier Contracts:
Al-Faisal Stationers has verbal agreements with its suppliers, which includes:
- Wholesale prices apply
- Payment within 30 days of delivery
- Delivery within 7-8 days of purchase order
- Defective or damaged products can be returned within 7 days
- Agreement valid for 3 months, renewable for another 3 months

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Note: This is a verbal contract, and it's important to have a clear understanding and agreement on
these terms to avoid any potential disputes.
2.Employee Contracts:
The shop has no employees, as it is run solely by the owner.
3.Customer Contracts:
There are no written contracts between the shop and its customers. However, the shop has a clear
refund and exchange policy, which is communicated to customers verbally.

TASK 02: SECP VISIT

Requirements for company formation in Pakistan
SECP (Securities and Exchange Commission of Pakistan):
According to the SECP Act of 1997, the Securities and Exchange Commission of Pakistan
(SECP) has been given the power to supervise and develop the corporate sector as well as the
non-bank financial markets, which include the capital markets, mutual funds, non-banking
financial companies (NBFCs), insurance firms, and private businesses.
Incorporation of company:
Any three or more persons associated for lawful purpose may, by subscribing their names to the
Memorandum of Association and complying with the requirements of the Companies Act, 2017
form a public company and any two or more persons so associated may, in like manner, form a
private company. Private company forms by a single person single member company.
Name of Company:
It is necessary to reserve unique name for your company and to make company within 60 days,
as name will only be valid for 60 days and will expired after that.
The name of our Heating, Ventilation, Air Conditioning (HVAC) Company is “ZAMAS Pvt.
Ltd.”
Capital:
The initial investment amount that would start up our company. The Capital for our company is
PKR. 3,000,000 (3 Million)
Directors/Members:
 Muhammad Zeeshan Khan (CEO)
 Abdullah Ilyas (Managing Director)
 Maria Awais (Marketing Director)
 Aqsa Javeed (Director Finance)
 Sunaiha Kashif (HR Manager)

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 The one with higher investment will be having the authority. In case, he lacks in the working
knowledge of the firm, he can appoint anyone else on his behalf.
The change in number of partners of management body of the firm will take place with help of a
legal advisor, which will be hired at the time of need. In addition, similar procedure will be
followed if nature of company needs to be changed.
For the time being, there is no resolution passed or decided to issue shares and convert to public
company.
The incorporation takes 4-6 weeks, which includes issuance of certificate of incorporation.
Incorporation:
According to the information provided by SECP representative. Corporation is divided into two
forms:
 Form-1 is for Name registration
 Form-2 is for company registration.
Form-I (Name Registration):
Firstly, you have to make an application for name registration applied by director under the
company’s incorporation regulations, 2017 along with the challan of 500rs. After deciding a
unique name, you can check its availability on the website of SECP by creating an online
account.
If it is available, you can reserve it by taking few steps:
 Login to e-services on SECP website
 Provide valid CNICs and required information on the form
 After submission you’ll receive a security code for verification
 Pin will be generated after verification
 Generated challan of 500rs can be deposited to any branch of UBL and MCB or can also
be deposited online.
Form II (Company Registration):
We require the following documents for registering a company in Pakistan:
I. Articles of Association (rules and regulations that govern the company) and Memorandum of
Association (contains information for company incorporation)
 Article of Association:
It shall discuss, deal, negotiate, and communicate with the Government
authorities and/or private individuals in all matters concerning or affecting the
business of its members

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 Memorandum of Association:
Memorandum of Association is the constitution of a company; it is the main document, which
provides information about name, situation of registered office, objects, liabilities and capital of
a company. A company cannot be incorporated without having a Memorandum of Association.
II. CNIC copies of the directors, CEO, nominee
III. If we planned to set up a specialized business, we will require a NOC or letter of intent from
the concerned authority.
IV. The authorization of subscribers for filing documents
V. Registration fee slip
VI. The company incorporation fee is Rs.1800 for online submission if the nominal capital is not
more than Rs, 100,000. If we submit the company incorporation offline, it will be charged
Rs. 3500.

SECP Visit Experience

Our first experience of visiting the SECP was rather bitter, as we were the first group to make the
visit; we were not met with a positive response from the officials present there and were asked to
go check everything online.
After that, we took a visit from the University and planned our visit to SECP again. There we
were directed towards an office cabin from the information desk, where the present
representative was to guide us about the company that we were to register.
They gave us minor information that we gathered by our research online as well. They even
mentioned that our company requires a mechanical engineer at first and we have made an
arrangement for that too. Also, we were asked to hire a lawyer which is yet to be arranged.

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 TASK 03: FBR Visit
TAX COLLECTION AS PER

Income tax collection:

1. Tax Registration: Individuals and businesses that meet certain income thresholds are
required to register for income tax with the tax authority. This registration process
involves providing relevant information about the taxpayer's income, assets, and
liabilities.
2. Filing Tax Returns: Taxpayers are required to file annual tax returns with the tax
authority, reporting their income, deductions, and tax liabilities. The deadline for filing
tax returns varies by jurisdiction but is typically within a few months after the end of the
tax year.
3. Assessment: Upon receiving tax returns, tax authorities may assess the accuracy and
completeness of the information provided. They may conduct audits or investigations to
verify income and expenses reported by taxpayers.
4. Tax Assessment Notice: After assessment, tax authorities issue a tax assessment notice
to the taxpayer, detailing any adjustments made to the reported income or deductions and
the resulting tax liability. Taxpayers have the right to appeal the assessment if they
disagree with the findings.
5. Tax Payment: Taxpayers are required to pay the assessed tax liability within the
specified deadline. Failure to pay taxes on time may result in penalties and interest
charges.
6. Enforcement: Tax authorities have various enforcement mechanisms to ensure
compliance with tax laws, including the ability to levy liens, seize assets, or take legal
action against non-compliant taxpayers.

Sales Tax Collection:

1. Tax Registration: Businesses engaged in the sale of goods or services are typically required
to register for sales tax with the tax authority. This registration process involves providing
information about the business activities subject to sales tax.
2. Issuance of Tax Invoices: Registered businesses are required to issue tax invoices to their
customers for taxable goods or services provided. These invoices must include details such as
the seller's information, buyer's information, description of goods or services, and the amount
of sales tax charged.
3. Collection of Sales Tax: Registered businesses collect sales tax from their customers at the
point of sale. The collected tax is then reported and remitted to the tax authority according to
the prescribed schedule.
4. Filing Sales Tax Returns: Businesses are required to file periodic sales tax returns with the
tax authority, typically on a monthly or quarterly basis. These returns report the total sales
made during the reporting period and the corresponding sales tax collected.

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 5. Assessment and Payment: Tax authorities assess the accuracy of sales tax returns filed by
businesses and may conduct audits or investigations to verify the reported sales and tax
liabilities. Businesses are required to pay any assessed sales tax liability within the specified
deadline.
6. Enforcement: Similar to income tax collection, tax authorities have enforcement
mechanisms to ensure compliance with sales tax laws, including penalties for late filing or
non-payment of taxes.

Overall, both income tax and sales tax collection involve registration, reporting, assessment,
payment, and enforcement procedures to ensure compliance with tax laws and regulations.

CHALLENGES

These challenges can vary depending on the specific context, but some primary ones include:
1. Tax evasion and avoidance: Businesses may engage in various strategies to evade or avoid
taxes, such as underreporting income, hiding assets offshore, or exploiting loopholes in tax
laws. This can significantly reduce the tax base and revenue for governments.

2. Complex tax systems: Tax laws and regulations can be intricate and convoluted, making
compliance difficult for businesses, especially small and medium-sized enterprises (SMEs).
Understanding and navigating the complexities of tax codes can be a significant challenge.

3. Informal economy: in our countries, a substantial portion of economic activity occurs in the
informal sector, where businesses operate outside the purview of tax authorities. Bringing
these businesses into the formal economy and ensuring tax compliance can be challenging.

4. Resource constraints: Tax authorities may face limitations in terms of staffing, technology,
and financial resources, which can hinder their ability to effectively enforce tax laws and
collect taxes from businesses.

5. Globalization and digitalization: The increasing globalization of business operations and

the rise of digital commerce have made it more challenging for tax authorities to track and
tax business activities across borders. Multinational corporations may use complex structures
to shift profits to low-tax jurisdictions, reducing their tax liabilities.

6. Tax incentives and exemptions: Governments often offer tax incentives and exemptions to
businesses to promote investment, economic growth, and job creation. However, these
incentives can sometimes be exploited or misused, resulting in revenue losses for the
government.

7. Taxpayer compliance culture: The culture of tax compliance varies from country to country
and can be influenced by factors such as attitudes toward taxation, trust in government
institutions, and perceptions of fairness in the tax system. Promoting a culture of voluntary
compliance among businesses is crucial for tax authorities.

8. Taxpayer education and awareness: Many businesses, particularly smaller ones, may lack
awareness of their tax obligations or the resources to comply with complex tax laws.

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 Providing education and support to help businesses understand their tax responsibilities can
improve compliance.

Addressing these challenges requires a combination of measures, including simplifying tax systems,
strengthening enforcement mechanisms, enhancing international cooperation on tax matters,
investing in technology and capacity-building, and promoting tax compliance through education and
outreach efforts.

Task 04: Property dealer visit

We interviewed Mr. Kashif Rafique , who has been working as a property dealer for 6 years.
We collected the following information from him:
 Legal procedure for renting a property
The client comes to the property dealer when they want to rent a property, the property dealer
then asks for all the information about the property, like
 Whether it is a commercial or residential property
 Area of the property
 How much rent they want for it

The landlord credentials like the proof of identity and proof of ownership are then checked to
ensure that they are the actual owner of the property, this is done to avoid future problems with
the rental agreement.
They take commission from both sides, the landlord and the tenant.
A non-judicial stamp paper (also called the rental agreement) is bought from either the bank or
a vendor, which is then prepared by the property dealer. The property dealer types the conditions
on the stamp paper, the stamp paper will have signature and thumb print of the owner, the tenant
and a witness and will be registered by the nearby police station or police khimat markez. A
stamp of the police station is put on the stamp paper when it is registered.
The tenant must give one-month notice before moving out of the property, same goes for the
landlord to give a notice of one month to the tenant for vacating the property. In that time period
the tenant still has to give the due rent.
The contents of the agreement are typically written in Urdu.
Legal requirements that are written in the stamp paper:
 Tenant purpose for the rental property (in case of commercial property)
 Duration of the rental agreement
 Schedule of the rental payments (mostly on a monthly basis)
 Security deposit amount

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  Who is responsible for paying utility bills, repairs, maintenance for the property every
month.
 Incremental percentage in rent and other terms and conditions.
Once the agreement is done, the tenant has the right to live on the property and are responsible
for keeping it clean and properly.

Transfer of property
Procedure for sale/purchase of property
1. Token & Bayana
The first step towards property selling or buying is the payment of token money. It is the amount
that a potential buyer pays as a sign of willingness to buy the property. The seller after receiving
the token money stops negotiations with any other potential buyers. If the deal fails before any
further step, the seller returns the token money with appropriate deductions. The second step
after token is the payment of the bayana.
Bayana is the first official payment that the buyer pays to the seller. It is 25% of the total
payment. Bayana comes with an official document, which enlists a set of rules that the buyer and
the seller have to follow throughout the process. Proper payment of the bayana is necessary for
the exchange of the documents. Following are some of the details of the property sales
agreement that is considered a must in Pakistan:
 Details of the Property listed for Sale.
 Sales terms for the Property.
 Total amount of the Deal.
 Time duration in which the buyer will clear the amounts.

2. Document verification
After token money and bayana, the seller has to show the original documents of the property.
These documents are verified by the land development authority(LDA) or the private housing
authority (PHA). Property documents are checked for the authenticity of the property’s location
and the owner. Following are the documents required from the buyer and the seller:

 Photos of both parties

 National Identity Card (CNIC) Copies
 Title Deed (Document claiming the Ownership of the Seller)
 Sales Deed (Document having all the important details; agreement)

Apart from the documents concerning both parties, certain other documents are needed for
governmental usage. The following checklist enlists all those documents:

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  The Fard-e-Malkiat (The document that officially confirms the ownership of the seller
over property by the Land Registry Office)
 Non-Demand Certificate (NDC). This document shows that the seller does not owe any
previous payments over the property.
 Authority Letter (Usually issued by the private housing societies for the plots registered
for sale)

3. Stamp paper
After the verification of the above documents, the final process of property transfer starts. A
stamp paper is a document, which drafts the sales deed. Depending upon the value of the
property, the stamp paper differs accordingly. The value of a property is mainly influenced by
the location.
4. Tax paying
After the completion of the draft in the form of stamp paper, both parties have to pay the
required taxes. It marks a start to the final step.
5. Sales deed
Execution of the sales deed is the last step before a property is officially transferred to the new
owner. A sub-registrar or magistrate verifies all the important documents and listens to both
parties. After confirmation, he leaves a satisfactory remark that the property is now officially
transferred to its new owner.

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