Just like other types of business structure, a general partnership must register with HMRC. This is that the partnership itself, and the partners in it, all declare and pay tax correctly. The partnership will have a nominated partner whose job it is to carry out various administrative tasks, such as registering the partnership.

How do I set up a business partnership?

Anyone can set up a partnership, and it’s fairly straightforward to do. The partnership will appoint a ‘nominated partner’ who is responsible for the partnership’s record keeping, as well as any paperwork or forms. They’ll also be responsible for registering the partnership with HMRC.
 

 
This registers the partnership for Self Assessment in its own right, so HMRC know which tax returns to expect, and from who. The partnership will receive its own Unique Taxpayer Reference (UTR) number, which will be different to each partner’s UTR number.

If you’re using an agent, such as an accountant, to act on behalf of the partnership, you’ll need to submit a 64-8 authorisation form with the SA400. This gives HMRC permission to discuss the partnership with your agent.

What do I need to complete a SA400 partnership registration form?

To fill in your SA400 form and register the partnership with HMRC, you’ll need the partnership’s details. This includes the partnership name, address, nature of business, and date of commencement.

Do the partners register separately in a partnership?

Yes. As well as registering the partnership itself, each partner must register with HMRC too. Even if they’re already somewhere on HMRC’s books, they’ll need to confirm that they’re also now a partner in this particular partnership. They’ll each be responsible for their own tax returns and paying their own tax and National Insurance.

• Individual partners should register using form SA401
• Partners who are another partnership, company, or trust must register using form SA402

Do I need a partnership agreement?

The partners in the partnership can draw up a deed, which is a  legally binding document. The document isn’t compulsory, but having one could save disagreements at a later date.

A partnership deed can set out the rights, responsibilities, and duties of each partner. This can include how the partnership should be run, as well as how to share any profits.

What are the partners responsible for?

The partners of an ordinary partnership are liable for the debts of their business, just like a sole trader is in theirs. This can have implications for their personal assets if the business doesn’t work out.

Partners normally share the running of the business, together with any profits or losses made by the partnership. However, this may depend on the type of partner, and whether they have drawn up a ‘deed of partnership’.

• General partners usually share all responsibilities of a partnership business, including investment in the business, management and profits and losses, but their personal assets may be at risk if anything goes wrong. Every ordinary partnership or limited partnership has to have at least one general partner.
• Partners who are limited are only responsible for debt which is equal to the amount of their initial investment or less.
• A sleeping partner will make an investment into the company, take a share of any profits but doesn’t have any say in the running of the partnership.

Learn more about our online accounting services for partnerships. Call the team on 020 3355 4047, or get an instant quote online.

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Elizabeth Hughes

A content writer specialising in business, finance, software, and beyond. I'm a wordsmith with a penchant for puns and making complex subjects accessible. Learn more about Elizabeth.

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