A partnership involves two or more people coming together to be co owners of a business who then share all the profits. Since there are specific laws surrounding the formation and dissolution of partnerships it is very wise to consult a lawyer and an accountant when considering going into a partnership in order to draw up the relevant paperwork and have knowledgeable people you can go to for advice on the best way of starting your business.
Once you have found a suitable partner and have decided to form a business partnership you should prepare an agreement in writing detailing everything in order to avoid any disagreements or misunderstandings. The main things this should include is the details of both partners, a description of the business and what it entails, the duties and roles of each partner, how profits and losses are to be divided and what steps were to be taken should the partnership be dissolved.
A partnership is very simple to set up as it does not involve a large amount of paperwork, unlike limited companies. There are three forms that need to be filled in and sent to HMRC; one for the actual partnership, and one for each partner. At the end of the tax year business partnerships also have three tax returns to submit; the partnership return along with each partners self assessments.
If you would like any help or advice on setting up a business partnership or would like us to take care of this for you free of charge then please do not hesitate to phone or email us, or alternatively, you can simply use the live chat link available.
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MAAT and ICPA accountant, with a passion for making accountancy and bookkeeping accessible. Other interests include cloud-based software development for web and mobile access, keeping fit, reading, and entrepreneurship.