Corporate governance is very important for the financial development of the country. After the East Asian financial crisis, developing countries realize the importance of corporate governance in the development of the economy. In 1990 the OECD Organization for the. The relationship between ownership structure and corporate performance constitutes an important area of ​​study in the broader field of Corporate Governance over the last two decades. Researchers have mainly focused on the interests of managers and major shareholders in corporate ownership. These researchers explored the relationship between ownership structure and firm performance while keeping in mind the conflict of interests of firm managers and owners. Corporate governance is concerned with how the financing provider achieves a return on its investment (Shleifer and Vishny, 1997). Corporate governance mechanism is also very important in developed economies. According to Shleifer and Vishny (1997) in developed countries the corporate governance mechanism occurs with small differences. In less developed countries, corporate governance mechanisms do not exist. Corporate governance is a mechanism through which outside investors protect themselves from insiders (La Portal et al, 2000). Conflict arises in corporations when the shareholders (owner) and the manager (agent) or different shareholders have divergent objectives. Second, conflict also arises due to information asymmetry about participants' actions and preferences. Businesses need a corporate governance structure to address these issues. Jensen and Meckling (1976) conclude that this problem can be solved by separating business ownership from business management. This separation helps managers pursue their own interest rather than that of shareholders. In countries with little paper... rations were deducted from sales and income taxes were recognized. It is one of the best measures of a company's overall performance, especially when combined with an evaluation of how it is using its working capital. The measure is commonly plotted on a trend line, to judge performance over time. It is also used to compare a company's results with those of its competitors. Net Profit Ratio = Net Profit/Net Sales *1002.9 Delimitations: The data is selected by Pakistan Security Exchange Commission, that's why the conclusion drawn from this study will be true for companies of PakistanFinancial companies excluded from the test. Companies are also excluded from the test due to the unavailability of data. The operational and financial mechanism behind the effect of ownership structure on firm performance is not analyzed to limit the scope of analysis.