A partnership consists of 2 or more individuals that share the control, responsibility and finances of the business.   Each partner assume full liability for any debts incurred by the business and all profits are shared either equally or according to pre-agreed profit share ratios. There are advantages and disadvantages to becoming part of, or creating, a business partnership.

Advantages:

• Business partnerships are relatively easy to set up.  It is important to ensure there is a written partnership agreement in place, regardless of how well you know the person/people you are going into business with.
• With more than one owner, the ability to raise funds for running the business may be increased.
• The partnership should benefit from the wider business experience from all the partners.
   

Disadvantages:

• Each business partner is jointly and individually liable for the actions of the other partners.
• Profit shares must be agreed between all the partners. 
• The decision making process for the partnership can take longer than a sole trader as there are more people involved in the process
• Some benefits that would be deductible for employees, are not deductible from business income for partners.

How we can help

If you are interested in meeting with one of our accountants, we are always happy to discuss your business situation and the options available - whether you are thinking of starting a new business partnership, or you are already established.