Partnership

If there are two or more of you wanting to set up in business to make a profit a partnership could be the option for you.

A partnership is governed by The Partnership Act 1890 or a partnership agreement which we could draft for you.

The purpose of an agreement is to be clear about what can be done by either partner, or what needs the consent of both and exit routes in case you fall out. You should consider protecting the business and each other in the event of one of you dying or becoming critically ill. We can suggest a tax efficient mechanism to be incorporated within your agreement.

A different type of partnership is a Limited Liability Partnership which is registered at Companies House and has similar filing obligations as a company. You will still need an agreement to safeguard each member and regulate the relationship between them.

Advantages:

• Shared workload
• Shared risk
• If an LLP limited risk

Disadvantages:

• Shared profits
• No limited liability if not an LLP
• More administration than a sole trader

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