A partnership is where two or more people come together to carry on a business, trade or other activity, with a view to a profit. There are two forms of partnership in the UK, traditional unincorporated partnerships and limited liability partnerships (LLP).
In a traditional unincorporated partnership, your business partner (or partners) and yourself are personally responsible for the business. This includes the sharing of profits in an agreed profit sharing ratio as well as assuming liability for bills for goods and services purchased for your business and any losses the business makes.
Unincorporated partnerships are not required to be registered at Companies House and have no obligations to maintain statutory
records, prepare and file statutory accounts or to submit an annual return to the Registrar of Companies.
LLPs are a vehicle used by businesses whose partners (or members) wish to adopt a more corporate business structure as well as limiting their personal exposure to the debts of the business. Partners’ responsibilities and share of the profits are set out in an LLP agreement. ‘Designated members’ have extra responsibilities. If the business runs up debts, the liability of partners is limited to the amount of money they have invested in the business, unless they have given further personal guarantees. This kind of partnership structure is common within the professions although in recent years many professional practices have incorporated their businesses as limited companies.
LLPs are incorporated at Companies House, have a registered office and as their name suggests, enjoy the protections of limited
Whether an unincorporated partnership or an LLP all the partners must:
- Send a personal Self Assessment tax return every year
- Pay Income Tax on their share of the partnership’s profits
- Pay National Insurance
All partnerships must register for VAT if you expect its takings to be more than £82,000 a year.
If you are a partner in a traditional partnership business experiencing financial challenges we are able to offer the following services:
- Administration of the partnership
- Bankruptcy for individuals
- HMRC Aggressive Tax Planning Claims
- Individual Voluntary Arrangement
- Non-Statutory (Informal) Solutions
- Partnership Voluntary Arrangement
Debt Advice for Business Partnerships in London
For further debt advice for business partnerships in London, please contact us today.