A business partnership shares control, responsibility and finances between 2 or more people.    The partner or partners take on full liability for any debts incurred by the business and all profits are shared either equally or according to pre-agreed profit share ratios. Ordinary partners also take on equal responsibility and decision-making in the running of the business. There are advantages and disadvantages to entering into a business partnership.

Business Partnership Advantages:

• Business partnerships are relatively easy to establish; make sure time is taken in drafting partnership agreements to avoid future problems.
• With more than one owner, the ability to raise funds may be increased.
• The business can benefit using the knowledge base and experience of all of the business partners.
   

Business Partnership Disadvantages:

• Business partners are jointly and individually liable for the actions of the other partners.
• Business partners, like sole traders are 100% liable for the actions of the business.
• Profits must be shared evenly between all partners. 
• Since decisions are shared, disagreements can occur, and therefore the decision making process can take longer.
• Some employee benefits are not deductible from business income on tax returns.

How we can help

If you are interested in meeting with one of our accountants, we are always happy to discuss your current and potential business situation - whether you are venturing into a new business partnership, or you are already established.